EMPOWENMENT

Faulu rolls out support plan for SMEs in Kenya

The initiatives is expected to take six months

In Summary

•The forums will take place countrywide for the next 6 months until end of year.

•Some of the reviewed products include Bid bonds, Performance bonds, and Advance Payments Guarantees.

Faulu Bank CEO Apollo Njoroge (left) demonstrates the features of the Bank’s newly launched mobile app dubbed Faulu DigiCash to the Bank’s Board Chairman George Maina (centre). Looking on is Eclectics head of Business Development Jonah Ngui.
Faulu Bank CEO Apollo Njoroge (left) demonstrates the features of the Bank’s newly launched mobile app dubbed Faulu DigiCash to the Bank’s Board Chairman George Maina (centre). Looking on is Eclectics head of Business Development Jonah Ngui.
Image: FAULU BANK

Faulu Bank commenced countrywide business community engagements aimed at supporting SMEs to build resilience in their businesses through access to financing from the bank.

SMEs make up a large part of Kenya’s economy, accounting for approximately 98 per cent of all businesses and providing about 80 per cent of total employment.

The sector also contributes up to 33.3 per cent of GDP but despite their major contribution to economic development, they face immense challenges including access to finance.

Speaking during the inaugural SME forum held in Thika, Faulu  managing director, Apollo Njoroge said the significance of SMEs in the country’s economy cannot be ignored.

"SMEs play a pivotal role in job creation and contribute up to 8 per cent to the GDP. It is because of this that we saw it fit to diversify our portfolio as a bank," said Njoroge.

The bank also revamped its trade finance solutions to facilitate both local and international trade and commerce options for our SMEs.

Some of the reviewed products include Bid bonds, Performance bonds, and Advance Payments Guarantees.

To reduce the risk exposure for the SMEs, microfinance will seek key partnerships with reputable underwriters.

Microfinance banks control at least five per cent or Sh33 billion of the SME portfolio in Kenya while commercial banks control 95 per cent which is valued at Sh605 billion.

The bank reviewed its Trade Finance Offering to offer competitive pricing, and flexible collateral and to improve efficiency for the 7.4 million SMEs in the country through a quick turnaround time.

Among the key changes in these offerings include the introduction of unsecured limits for performance bonds and the consideration of concessionary commissions for agents on a case-to-case basis.

The forums have already been executed in Thika and Nakuru, the regional forums have been scheduled to take place in six to ten counties until year-end.