…..this is a risk sharing portfolio guarantee agreement that will allow easier, speedier processing and approval of loans to the SMEs.
Chase Bank and French Development Agency (AFD) partners to offer SMEs credit with favourable terms
Nairobi 13/03/2014…..Chase Bank has today sealed a risk sharing agreement with the French Development Agency (AFD) to offer up to EUR 2 million (Kes 230Million) in loans, to Small, and Medium Enterprises (SMEs) on a portfolio guarantee basis.
Coming hot on the heels of the Bank’s recent line of credit agreement of Khs 3.4 billion (USD40 million) with Proparco, a private sector subsidiary of AFD, Chase Bank has been actively stepping up in strengthening and scaling up its loan offering to the sector.
This is the first time AFD has signed such a risk sharing partnership with Chase bank. This facility unlocks opportunities for the SMEs to access credit on favourable terms, hence fostering growth and employment, which are much needed in the current economic environment.
According to the Chase Bank’s Deputy Chief Executive Officer, Paul Njaga, the Bank’s move to engage in such strategic alliances is aimed at enabling the SME sector to enjoy quicker access to financing. He noted that under the portfolio guarantee arrangement, the Bank will match AFD’s undertakings in every transaction, bringing the total maximum portfolio to EUR 4million (Kes 500Million). He disclosed that the facility is based on a 50/50 risk sharing agreement.
Speaking at the signing ceremony, Mr. Njaga said: “As 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.”
Speaking at the signing ceremony, the AFD’s Regional Director, Mr Terracol said that the AFD’s objectives resonate with Chase Bank’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.
“SMEs are the backbone of the Kenyan economy; they play a vital role in wealth creation. However, business development and wealth creation is hampered by the lack of access to financing. This situation has prompted AFD to develop a risk sharing tool to give this sector easier access to financing from financial institutions. We are pleased to work with Chase Bank in achieving that goal through the portfolio guarantee agreement we are signing today. Chase Bank has found an ideal partner to contribute towards further improving the economic development of this country. This move is also supported by the fact that Chase Bank shows a strong commitment to the double bottom line of social impact and financial inclusion and stability which coincides with AFD’s mission and vision in Kenya, said Mr Terracol.
Chase Bank has been the fastest growing indigenous Bank in this country over the past seven years, exhibiting impressive financial results with compounded annual balance sheet growth above 56 percent. The Bank reported impressive end year results, with a profit after tax of KSh 1.56 billion, representing a growth rate of 74%. The Bank’s balance sheet as at December 2013 stands at Ksh 76.6 billion. The Bank’s growth has been attributed to unrivalled strategic planning, increased lending and robust growth in customer base.
About Chase Bank:
Chase Bank (K) Ltd was incorporated in 1995. The Bank received awards for being the Best SME Bank 2013 from Global Financial Markets Awards & Think Business Kenya as well as the Fastest Growing Bank in Kenya in 2009 and 2010, as well as a special award for product innovation, at the Banking awards 2011 and 2013 in recognition for their role in creating innovative products for the SME market.
Chase Bank places a keen focus on the SME and the provision of innovative products for this ever growing market. The Bank, modeled around relationship banking provides its customers with value added services like Bank Assurance, Bank Brokerage, and off shore investment opportunities with the aim of improving their overall customer experience. www.chasebankkenya.co.ke
About Agence Française de Développement (AFD)
Agence Française de Dévelopement (AFD) is a public development finance institution that has been working to fight poverty and foster economic growth in developing countries and the French Overseas Communities for seventy years. It executes the policy defined by the French Government. In 2012, AFD approved roughly €7 billion to finance activities in developing countries and the French Overseas Communities. AFD Group offers grants, loans, credit lines, risk‑sharing mechanisms, equity investments and technical assistance. The complementarily of these instruments allows it to tailor its support to the specificities of each counterpart, country and region.