AfDB, French bank ink Sh5bn small firms deal

Small and medium enterprises (SMEs) eyeing cross-border trade will soon access credit from local banks after a French conglomerate signed a Sh5 billion guarantee deal with the African Development Bank. FILE PHOTO | NMG 

By JAMES KARIUKI
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Summary

• Small and medium enterprises (SMEs) eyeing cross-border trade will soon access credit from local banks after a French conglomerate signed a Sh5 billion guarantee deal with the African Development Bank(AfDB).
• The three-year AfDB-Natixis deal set on a 50/50 risk-sharing agreement will cover a portfolio of commercial transactions worth Sh10 billion that supports commercial operations worth Sh60 billion million in Africa over the next three years.

Small and medium enterprises (SMEs) eyeing cross-border trade will soon access credit from local banks after a French conglomerate signed a Sh5 billion guarantee deal with the African Development Bank(AfDB).

The three-year AfDB-Natixis deal set on a 50/50 risk-sharing agreement will cover a portfolio of commercial transactions worth Sh10 billion that supports commercial operations worth Sh60 billion million in Africa over the next three years.

AfDB director of financial sector development Stefan Nalletamby said the RPA allows them to extend support to African SMEs’ foreign trade operations.

"Today's signing responds to our desire to develop financial partnerships with strong non-regional banks, to boost trade finance in Africa and further support intra-African trade, as outlined in our Trade Finance Program endorsed in 2018," said Mr Nalletamby.

Agribusiness, health, services and industrial sectors will benefit from the deal promoting creation of new jobs, products and companies to attain higher profits and revenues for Kenya and other African states.

“This historic agreement allows us not only to better support our clients in Africa but also to further strengthen the strategic relationship that we have the privilege of developing with the African Development Bank,” said Natixis Senior Banker Marc Jaskowiak.

Credit remains a major crunch to doing business in Kenya and Africa in general due to stringent conditions as well as low capitalisation of local commercial banks.