FORECAST

Jijenge credit predicts growth in MSME lending

The firm is planning to expand its lending volume in a bid to meet the demand.

In Summary
  • It has disbursed over Sh200 million for pandemic-related loans
  • According to the microlender, only 1.56 million out of7.41 million MSMEs in Kenya are licensed. 
Jijenge Microfinance CEO Peter Macharia
Image: HANDOUT

Microlender Jijenge Credit Limited is predicting a surge in the number of loan disbursements towards the small and medium enterprise (SME) sector amid growing demand.

The firms’ chief executive Peter Macharia now says the loan demand is being driven by the ongoing tough economic challenges compounded by the Coronavirus pandemic.

“When Covid-19 hit, it came with a lot of learning lessons and while we offered an extended moratorium or tax holidays to our clients, we still feel there is a need to support this group back on their feet as part of our expansion plans into post-Covid 19 era,” he said.

Macharia explained that part of the company’s ambitions will be to expand its lending volume in a bid to meet the demand.

With public service vehicles (PSV) now back to carrying full capacity, Macharia says, the move by the State, albeit a gamble in the eyes of medical observers, will boost certain business operations that were operating with thin margins.

“We are seeing a growing interest from SMEs in the transport sector knocking on our doors for additional funding to expand their operations. It is a good sign and hopefully, this will fuel our desire to rethink our expansion plans across the country,” he said.

The microlender estimates that there are about 7.41 million MSMEs in Kenya, and only 1.56 million are licensed while 5.85 million are unlicensed – meaning the demand for loans among the subsector is inestimable.

Jijenge Credit offers car loans to vehicle owners with valid logbooks at relatively low interest rates with a repayment period of up to 12 months, double the time offered by other microfinanciers in Kenya whose period can be stretched by up to 24 months.

Last year, the firm introduced the digital interface check-off system which Macharia says will play a key role in its lending ability.

It has disbursed over Sh200 million for pandemic-related loans and moratoriums to cushion customers who are still reeling from the adverse impact of the third wave and new variant virus as well as a distraught economy.