Chase Bank has sealed a risk sharing agreement with the French Development Agency (AFD) to offer up to EUR 2 million (Ksh 230Million) in loans, to Small, and Medium Enterprises (SMEs) on a portfolio guarantee basis. This is a risk sharing portfolio guarantee agreement that will allow easier, speedier processing and approval of loans to the SMEs.
The partnership comes hot on the heels of the Bankâ€™s recent line of credit agreement of Khs 3.4 billion (USD40 million) with Proparco, a private sector subsidiary of AFD.
Chase Bankâ€™s Deputy Chief Executive Officer, Paul Njaga noted that under the portfolio guarantee arrangement, the Bank will match AFDâ€™s undertakings in every transaction, bringing the total maximum portfolio to EUR 4million (Ksh 500Million). He disclosed that the facility is based on a 50/50 risk sharing agreement.
Speaking at the signing ceremony, Mr. Njaga said: â€œAs in the past, Chase Bank remains steadfast in transforming the SME sector. This is demonstrated in our focus to provide them with better and easier platforms in accessing credit. This facility is unique in several ways as it represents investment, productivity and acceleration of growth opportunities for SMEs across the board.â€
AFDâ€™s Regional Director, Mr Terracol said that the AFDâ€™s objectives resonate with Chase Bankâ€™s commitment to growing its business to stimulate the SME growth. He disclosed that Africa particularly the Kenyan economy derives its growth opportunities from this sector. As such, providing the sector a conducive and enabling environment through such strategic alliances provides a brighter economic outlook for the country.