What Is Stock Finance Facility And Why Is It Important For SMEs?

As the maize harvesting peaks across Kenya, commodity traders such as cereal shops are busy buying Kenya’s staple crop, especially from farmers in the Trans Nzoia and Uasin Gishu breadbaskets. Over at the Maasai Mara, hotels and tour operators are busy catering to the wave of tourists coming to see the wildebeest migration.

Now, imagine if you run out of funds to buy maize or ingredients for your hotel because you could not access much-needed capital, this would be disastrous because it would mean missing out on the peak earning season.

These are some of the challenges SMEs face because of the lack of credit to stock up on goods, especially during peak periods.

One key reason SMEs struggle is timing, because most financing products aren’t built for the urgent, seasonal needs of small businesses. Many SMEs don’t have the luxury of lengthy approvals processes or complex ones, as the above examples clearly illustrate.

Even when they qualify, many SMEs are held back by stringent collateral demands and long delays between application, approval, and disbursement.

Unfortunately, in the absence of getting credit from their local bank, SMEs often turn to the unregulated microfinance companies, which are glorified loan sharks, often charging usurious interest rates that can go well beyond 100% per year.

This approach never ends well for the SMEs that choose the shylock borrowing path. Either profit will be gobbled up by the obscene interest rates, or they will default and see their assets repossessed.

Using our two examples above, the consequences of inadequate financing ripple far beyond the individual business. When traders can’t buy produce in time, farmers are left without a market. When hotels can’t restock, tourists experience poor service. Imagine flying halfway across the world and there are no eggs or bread for breakfast!

In short, the entire value chain is disrupted, leading to income losses, food waste, and missed economic opportunities. That’s why affordable and timely credit is the lifeline for small businesses and those they work with.

Thankfully, more sustainable solutions are emerging.

Family Bank has the Stock Finance Facility. The Stock Finance Facility enables businesses to borrow up to KES 10 Million, payable through flexible terms. The facility enables shelves to remain fully stocked while the supply chain flows uninhibited.

On its part, Family Bank’s rolling out the Stock Finance Facility is cognizant that SMEs represent over 80% of the lender’s customer base. Part of the Bank’s 2025–2029 strategy is to scale SME lending and deepen market segmentation, and enable the lender to better address the specific needs of SMEs across various value chains for sustainable growth and long-term value.

For more details on the Stock Finance Facility, visit your nearest bank branch or contact Family Bank via respective channels.

Read Also: Family Bank Gets Ksh 2.6 Billion To Lend To Kenyan SMEs