AGF issues USD 5m loan portfolio guarantee to Sidian Bank to boost SMEs financing in Kenya

African Guarantee Fund CEO Jules Ngankam
African Guarantee Fund CEO Jules Ngankam. PHOTO/COURTESY

The African Guarantee Fund has issued a Loan Portfolio Guarantee to Sidian Bank to boost financing of the SME sector in Kenya. The Guarantee line worth half a billion Kenya shillings will be in place for a period of 4 years starting 2021.

The partnership seeks to support the growth of SMEs through the provision of guarantees for the Bank’s customer loan facilities. One of the challenges that many SMEs face in accessing credit, is the lack of adequate collateral to support their borrowing.

The AGF Loan Portfolio Guarantee will enable Sidian Bank to scale up its lending activities to Small and Medium-sized enterprises through the provision of credit facilities.

Sidian has been on the frontline in its support for SMEs across the country through a number of different instruments that seek to provide access to finance.

“At Sidian Bank, we are excited to partner with AGF in this Loan Portfolio Guarantee Facility. AGF is a valuable partner; they are as passionate as we are about supporting SME growth and success in Kenya and Africa” This last year has been particularly difficult for SMEs, having to grapple with a lot of uncertainty. We expect that this guarantee facility and our other financial solutions will provide much-needed support to business owners and enable them to emerge stronger,” speaking at the signing ceremony Sidian Bank CEO Chege Thumbi said

African Guarantee Fund’s objective is to support Small and Medium-sized Enterprises (SMEs), to play their role as engine drivers of growth. By closing the greatest obstacle, which is the financing gap, AGF enables SMEs to increase sustainable growth and to be a source of employment, skills, and wealth creation. In turn, this serves to reduce poverty throughout the continent.

“Sidian bank provides efficient and convenient solutions to Kenyan entrepreneurs. Our loan portfolio guarantee will enable them to provide more financial solutions to their SME clientele especially in view of the impact of the pandemic on SME businesses. Most importantly, the guarantee facility will have an impact on thousands who are directly and indirectly dependent on the income generated from the SME beneficiaries,
African Guarantee Fund Group CEO Jules Ngankam said.

Sidian Bank is supporting entrepreneurs in the country through the provision of transformational financial solutions, targeting mainly the SME sector.

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