Sidian Bank has secured Sh235 million from the East African Development Bank (EADB) for onward lending to small and medium enterprises (SMEs) in the agribusiness sector across the country.
The loan, which runs for eight years, comes with technical assistance in the form of capacity building to better equip the bank’s staff with skills on best practices for agribusiness financing and product structuring.
“This partnership will enable a significantly larger number of farmers, enterprises, producer organisations as well as those in the agribusiness value chain access affordable financing which will strengthen the agricultural sector which is key to the realisation of food security, one of the key pillars of the government’s (development agenda),” said the bank’s chief executive Chege Thumbi in a statement yesterday. The lender plans to utilise the facility for onward lending to small and medium-sized commercial farmers.
“The bank will also use the facility for onward lending to producer organisations, primary co-operatives and other establishments that target small to medium-sized farmers and small to medium enterprises as final beneficiaries, and which produce agricultural inputs or are engaged in the processing or off-taking or marketing of agricultural products,” said Mr Thumbi.
Investment firm Centum in March pumped Sh1.1 billion into the tier three bank, formerly known as K-Rep, in a rights issue meant to boost the lender’s core capital. Mr Thumbi said the capital injection will support trade finance, which the bank has been eyeing as part of a wider scheme aimed at growing its loan book.
Centum holds a 73pc stake in Sidian Bank which posted a Sh274m loss as at Sept 2017 compared to a profit of Sh220m made in a similar period a year earlier.