Small and Medium Enterprises (SMEs) have been the main driver of Kenya’s economy for a long time, with their contribution of more than 80% to the labor market and the spread of the new ideas in the fields of agriculture, industry, and trade.
But the lack of affordable financing has been the biggest problem most of these SMEs faced. The solution of this problem is in the hands of NCBA Group, which is one of the top financial institutions in East Africa. The bank is offering large loans and capacity-building programs with a focus on SMEs to help bridge the gap in financing.
Following its “Go for it” and “Change The Story” initiatives launched in 2023, NCBA is providing customized solutions that reiterate the vital aspects of growth, sustainability, and inclusiveness for the SMEs.
The SME lending portfolio of the bank is meant to cover the financing of almost all sorts of requirements by the customers. They offer secured business loans with a flexible repayment period of up to 60 months to both new and old clients who wish to diversify their assets, carry out projects, or just need working capital.
In the case of a liquidity crisis with a short tenure, NCBA can quickly provide up to KES 10 million in instant working capital through its business overdraft, which is payable within 12 months. As for the companies that are engaging in the trade of goods and are now benefitting from business stock loans, the facilities amounting to KES 300,000 can be used for the purchase of stock.
NCBA Bancassurance is there to make sure the assets are protected, while unsecured loans of up to KES 6 million are provided to businesses on lack of collateral to expand their business. Also, precious metals SME’s buying cars or machines for their use are allowed to get 95% of the purchase amount as asset financing.
One of the good moments was in 2021, when the partnership with Simba Corp was signed to extend commercial vehicle financing, thus allowing the automobile industry to bounce rapidly after the pandemic period.
Regarding trade finance, access to solutions such as LPO Financing and Invoice Discounting will no longer be limited by cash flow problems. Hence businesses will be given supplier discounts and exclusive credit limits.
The digital revolution has brought about changes, for instance, handle loan applications seven times faster than the national average, without the need for paperwork or Stawi, and NCBA Connect easily facilitates the digital platform, and so on.
Besides branch offerings on various MSME financing, NCBA aligns with social and gender development programs for its MSMEs. In 2024, the bank’s collaboration with Proparco, an arm of the French Development Agency, injected $50 million into both the green financing and women-led businesses sectors under the 2X Challenge scheme.
The commitment of NCBA runs deep. The target is for NCBA to mobilize KES 30 billion worth of sustainable financing by 2027, largely for climate-resilient agriculture and manufacturing SMEs.
Over 1,600 MSMEs are expected to be touched by this program, receiving assistance for the achievement of the gender equality, decent work, and climate action United Nations Sustainable Development Goals.
Capacity building is one of the main items on the agenda. In 2024, NCBA engaged Strathmore Business School to offer a subsidized 16-week Enterprise Development Program, concentrating on financial management and marketing, as a training course of choice for corporate and individual clients.
The Learning Management System run by the bank, inclusive of a variety of training activities, webinars, and modules, further engages and teaches firms to adapt and strengthen their competition.
NCBA’s outreach takes them to the whole country, and the visits to Eldoret and Mt. Kenya are some of the places where they engage with entrepreneurs and other people in the business community. They are trying to get into really hard to reach places by opening other branches.
For instance, the opening of the 99th branch in Kawangware and a new Utawala branch will be able to serve the people of the two locations who are financially excluded and/or underbanked.
“SME lending plays an indispensable role in driving the economy, and we are making the space for their success by releasing capital,” says Pauline Ndote, Group Director of Credit Management.
For NCBA, financing of the SMEs will continue to be the central pillar in the building of resilience, inclusiveness, and long-term economic growth – thus, creating one success story after another of real life entrepreneurs.