U&I Microfinance Bank has secured a $1 million (about Sh103 million)
loan from the Dutch social impact investor Oikocredit for lending to
small business. FILE PHOTO | NMG
Summary
- U&I Microfinance Bank has secured a $1 million (about Sh103 million) loan from the ...Dutch social impact investor Oikocredit for lending to small business.
- Oikocredit Investment manager Caroline Mulwa said the facility would uplift U&I Microfinance Bank’s lending to the small enterprises in the City.
U&I Microfinance Bank has secured a $1 million (about Sh103
million) loan from the Dutch social impact investor Oikocredit for
lending to small business.
Oikocredit Investment
manager Caroline Mulwa said the facility would uplift U&I
Microfinance Bank’s lending to the small enterprises in the City.
“This
loan will enable U&I expand its lending activities, by providing
its clients with access to finance, and creating a sustainable impact
for people on low incomes."
Small firms have witnessed credit rationing since the onset of interest rate controls as banks perceive them high risk.
U&I
Microfinance Bank, one of the 13 Microfinance Banks licensed and
regulated by the Central Bank of Kenya (CBK), was established in 2007 as
a credit only institution. It has five branches—two in Nairobi’s
bustling Gikomba market, one in Nairobi’s River Road and another one in
Thika. The micro lender granted a licence in 2013 mainly finances micro
and medium businesses. “The credit line will enhance and uplift our
lending to the small enterprises and help give the local economy an
extra boost,” said U&I Microfinance Bank chairman Muturi Kamande
during the signing ceremony. “Our plan is to expand and have a foothold
in every county in five years,” he said. Big banks and micro lenders
have turned to private equity firms to raise capital. They include Prime
Bank that got Sh5.1 billion from AfricInvest and Catalyst Principal
Partners and Sidian, which got Sh1.2 billion Investment Fund for
Developing Countries (IFU).
Kenyan banks have also in recent years taken substantial loans
from global funds, including the International Finance Corporation,
European Investment Bank, Agence Française de Développement and the
African Development Bank, attracted by relatively favourable terms of
debts like lower interest rates and longer maturity.
Co-op
Bank, KCB and Equity are among lenders that have borrowed from
international financiers to fund long-term lending business.
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