NBK secures Ksh. 1.1B to derisk lending to WASH sector

The National Bank of Kenya (NBK) has secured Ksh 1.13 billion from the African Guarantee Fund to provide affordable credit to Water, Sanitation and Hygiene (WASH) sector.

NBK Acting Managing Director Peter Kioko said the funds will also be use to cover credit extended to women-led businesses and green projects in Kenya without collateral.

The bank said the 7-year tenor guarantee will cover up to 50pc of collateral needs for a qualifying facility with 75pc cover for Women and Green Small and Medium Enterprises and will see the maximum cover for any borrower capped at Ksh 100 million.

“This strategic partnership will enable our MSME customers in the targeted sector, to overcome the financing barrier in their day-to-day financial management needs and therefore, unlock opportunities to spur growth,” said Kioko.

The credit guarantee is expected mitigate challenges such as access to affordable credit at friendly terms WASH sector, and women-led enterprises face when seeking business expansion.

“As NBK, we have a solid track record of supporting SMEs in Kenya and therefore with this partnership we are going to increase the number of SMEs we finance and also pay special focus to the women entrepreneurs, among others to facilitate their growth and in turn the growth of our economy,” added Kioko.

The guarantee facility will see AGF share the risks envisioned by the bank in situations where the target SME clients are unable to meet collateral threshold requirements.

“Overall, our partnership with NBK is a boost to Kenya’s target of universal access to water, sanitation, and hygiene services and ultimately, a step towards achieving the UN Sustainable Development Goal 6 of ensuring access to water and sanitation for all,” said Jules Ngankam, AGF Group CEO said

The guarantee is expected to strengthen NBK’s current programme such as Maji Konnect financing for Water Sanitation and Hygiene sector towards MSMEs, Corporates and Water Service Providers (WSPs).

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