Customers at a KCB branch in Nairobi. FILE PHOTO | NMG
Top tier lender KCB Bank has inked a funding deal with Kiambu County government aimed at cushioning local youth and traders against Covid-19 economic shocks.
Under the deal, KCB Bank will advance Sh1.3 billion to individuals and start-ups hard-pressed by the pandemic with county government acting as guarantor having deposited Sh138 million to the lender as collateral.
The Sh138 million, Kiambu Governor James Nyoro said, will help subsidise the interest rate from the bank so that the borrowers can access funds at seven per cent instead of the average market rate of 13 per cent.
More than 5,000 Kiambu residents are expected to benefit from the financing deal.
Mr Nyoro said the partnership deal dubbed ‘The Post Covid Economic Recovery Fund’ will provide youth, women, business groups and saccos access to affordable capital, to either begin businesses or sustain their businesses during and after the Covid Crisis.
“This facility will... support small and medium enterprises to address their cash flow issues which is a key concern during this period as businesses need easy access to short term loans,” Nyoro said during the signing of the MOU at Kiambu County headquarters.
Mr Dan Miano from Kenya National Chamber of Commerce and Industry Central Kenya said the intervention is timely and will spur economic growth and continuity to businesses.
“The effects of the pandemic continue to ripple through economies, women and young people have borne the greatest burden as a result of reduced employment opportunities, layoffs and poorly performing businesses, most of which are led and owned by women and young people,” he said.
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