The African Development Bank (AfDB) is for the first time going to give the Credit Bank 824 million shillings for them to lend it to Small and Medium-sized Enterprises (SMEs).
The loan, that was approved on Wednesday last week is expected to be given to companies in the agricultural, construction, renewable energy and manufacturing sectors and has a five-year maturity, with a two-year grace period.
Credit bank, according to the Director of financial sector development of AfDB Stefan Nelletanby, is said to be well-positioned to ensure that they are providing innovative, longer-term financial solutions to SMEs along several value chains including strategical financial solutions in Kenya.
“The board of directors of the African Development Bank Group has approved 824 million shillings targeted at financing Kenya’s Credit Bank for lending exclusively to small and medium enterprises in construction, agriculture, renewable energy, and manufacturing,” said Nalletanby in a statement.
The African Development Bank’s decision to lend the money for loans was inspired by their need to help achieve socio-economic goals.
The multilateral financer, AfDB says that the money should be able to help small businesses grow their businesses and in the future facilitate job creation, income generation, and sustainable growth.
In 2018, AfDB gave Kenya received a total of 48.2 billion shillings funding from AfDB, which was a rise by 37.7 percent.
This was after the multilateral financer, in which Nairobi holds a 1.44 percent stake committed to funding Kenya with 35 billion shillings in the year 2017.
Credit bank is one of the local banks that are now getting funds from global funds that have more favorable terms of debt, interest rates, and longer maturity.