Kenya to receive $90m from AfDB to fund SMEs and boost trade finance in Africa
The Africa Development Bank (AfDB) is providing financing to SME’s in Kenya and to boost trade finance.
The funding will be channeled to SMEs and local businesses in infrastructure, tradable and other transformative sector transactions in Kenya, according to a press release from the AfDB.
The release notes that the financial package is comprised of a $50m Line of Credit and $40m Trade Finance Line of Credit to the Commercial Bank of Africa Limited (CBA), Kenya.
It additionally says that the funds will provide liquidity support to expand financing to local businesses involved in value-addition in the trading, manufacturing, agriculture, infrastructure, transport, and construction, among other sectors, adding that, that will enhance job creation and facilitate financial access to businesses.
This intervention will contribute to CBA’s efforts to broaden access to its services, thereby reducing financing constraints faced by SMEs and local corporates in Kenya and reduce Africa’s trade financing gap, it explains.
The package, the release points out will promote private sector development as well as support broad-based economic growth. It will also contribute to CBA’s endeavors to complement the efforts of various partners such as the Government of Kenya’s Long Term Development Strategic Agenda and Vision 2030, which seeks to revitalize the economy by developing infrastructure and improving access to affordable credit for SMEs that support the economic transformation of Kenya’s economy to make it more resilient and diversified.
This transaction is well aligned with the AfDB’s Ten Year Strategy 2013-2022, as well as the Bank’s High 5 strategic priorities, including Industrialize Africa, Integrate Africa, Feed Africa and Improve the quality of life for the people of Africa, it said.
It will help to increase enterprise development and competitiveness through expansion of the economic base. This will be made possible by enhancing access to financial services and expanding access to social and economic infrastructure, which will contribute to inclusive growth, the release further said.
Established in 1962, the CBA is the largest privately-owned Kenyan bank with operations in Kenya, Tanzania and Uganda. It is ranked as a Tier 1 bank by the Central Bank of Kenya and is the 6th largest of 43 banks in the country.
By Pamela Ofori-Boateng
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