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Kenya’s SMEs get $90m from AfDB to grow businesses, innovations

Arrangements have been concluded between the government of Kenya and the Africa Development Bank (AfDB) to inject about $90m to the activities of SMEs in Kenya to boost trade finance.

In a statement by AfDB, the beneficiaries including SMEs and local businesses will use the facility to deepen infrastructure, tradable and other transformative sector transactions in Kenya.

The financial package is comprised of a $50m Line of Credit and $40m Trade Finance Line of Credit to the Commercial Bank of Africa Limited (CBA), Kenya, the lead arranger of the deal.

Apart from growing business activities, the fund is further designed to provide liquidity support to expand financing to local businesses involved in value-addition in the trading, manufacturing, agriculture, infrastructure, transport, and construction, among other sectors, adding that, that will enhance job creation and facilitate financial access to businesses.

The intervention will contribute to CBA’s efforts to broaden access to its services, thereby reducing financing constraints faced by SMEs and local corporates in Kenya and reduce Africa’s trade financing gap, it explains.

The fund will also grow private sector development as well as support broad-based economic growth. It will also contribute to CBA’s endeavors to complement the efforts of various partners such as the Government of Kenya’s Long Term Development Strategic Agenda and Vision 2030, which seeks to revitalize the economy by developing infrastructure and improving access to affordable credit for SMEs that support the economic transformation of Kenya’s economy to make it more resilient and diversified.

The package is part of AfDB’s Ten Year Strategy 2013-2022, as well as the Bank’s High 5 strategic priorities, including Industrialize Africa, Integrate Africa, Feed Africa and Improve the quality of life for the people of Africa, it said.

Apart from boosting enterprise development and competitiveness through expansion of the economic base, it will be made possible by enhancing access to financial services and expanding access to social and economic infrastructure, which will contribute to inclusive growth, the release further said.