More lending announced for Kenya small and medium enterprises

 Another Kenya's commercial bank has raised financing for lending to small -scale enterprises engaged in export business to East Africa Community (EAC).

   Bank of Africa Kenya says it has raised 25 million US dollars through a 7-year loan from one of its shareholders, Dutch Development Bank, FMO. FMO owns 20 per cent stake in Bank of Africa Kenya.
   "This money will be used to finance Kenyan small and medium scale enterprises that are engaged in export especially within the regional market," the Bank of Africa's Managing Director in Kenya Kwame Ahadzi, said in Nairobi on May 15.
   Ecobank Kenya had on the previous day announced that it has set aside undisclosed amount of money for lending to Kenyan companies engaged in export business especially within the region.
   Enthusiasm among Kenyan commercial banks to provide trade and asset finance for companies exporting in the region is growing because of the better economic prospects in the East Africa Community (EAC).
   Kenya is the dominant economy and the biggest exporter in the region. It acts as manufacturing hub for the rest of the EAC members.
   The new loan to the Bank of Africa by FMO will be disbursed in two tranches over a 12 month period.
   Bank of Africa - Kenya Chairman, Ambassador Dennis Awori said that the loan comes at an opportune time when the bank is actively introducing new products for the retail market.
   "The banking industry in Kenya is experiencing interesting times when financial access is on the increase through the many banking institutions. Bank of Africa Kenya will utilize the loan to finance medium and long term loans for eligible customers," Awori said.
   FMO, the Dutch Development Finance Company based in Netherlands said the loan is a vote of confidence in the ability of SMEs in Kenya to provide entrepreneurship leadership in the region.
   "At FMO, we have a strong belief in the power of entrepreneurship in economic development and therefore support sustainable private sector growth in emerging market," said Jorim Schraven, the FMO Manager- Financial Institutions for Africa.
   Kwame said the new loan will help the bank contribute to the Kenya's SME industry, and help the country meet some of its development goals under the Vision 2030, which seeks to make Kenya a middle income country by the year 2030.
   Currently, SMEs form 27 per cent of the Bank of Africa's borrowers based on the value of its loan book.
   "Our plan is to grow this value to 45 per cent in the next five years. When we started our operations in Kenya in 2004, we exclusively focused on lending to corporate. But we have changed that in recognition of the important role SMEs play," said Kwame. (Xinhua)