African Development Bank (AfDB) and Diamond Trust Bank (DTB sign agreement totaling USD75m to fund Kenya's SMEs
SMEs are critical to the expansion of the Kenya’s economy, as they possess great potential for employment generation.
The African Development Bank (AfDB) and Diamond Trust Bank (DTB) Kenya Ltd on Wednesday signed two agreements totaling Sh7.6 billion to be used to finance SMEs and local corporates in the country
“Promoting manufacturing and value addition in varied sectors are, therefore, an important part of our strategy to support Africa’s fledgling private sector with a view to enhancing the share of tradable goods. Our collaboration with commercial banks such as DTB is critically embedded in that fact that funding is an important enabler of private’s sector growth,” said Gabriel Negatu, Director General of the Bank’s Business Development and Delivery Office in East Africa.
Under the agreements, AfDB will provide a Ksh 5 billion (US$ 50 million) Line of Credit and a Ksh 2.5 billion (US$ 25 million) Subordinated Debt facility to DTB.
SMEs are critical to the expansion of the Kenya’s economy, as they possess great potential for employment generation, output diversification, development of indigenous entrepreneurship and forward integration with large-scale industries.
“This collaboration will enable DTB to entrench its position as a leading business bank in East Africa, helping more local companies grow and compete in the African and global marketplace,” said DTB Group CEO & Managing Director, Nasim Devji.
In recent years, there has been gross under-performance of SMEs which has undermined their contribution to economic growth.
Lack of funds, especially long term funding, is one of most daunting challenge SMEs face in Kenya.
AfDB’s funds will help to increase enterprise development and competitiveness through expansion of the economic base and is in line with its ten year strategy, 2013-2022, which includes, Integrate Africa, Industrialise Africa, Feed Africa and improving the living conditions of Africans.
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