The Bank has provided a partial guarantee to the tune of $10 million (Sh710 million) to make it possible for women entrepreneurs running growth oriented small and medium enterprises to get loans over the next five years.

AfDB has appointed the International Finance Corporation (IFC), the private sector lending arm of the World Bank, to manage the GOWE Kenya programme. The International Labour Organisation will serve as the technical advisor for the first two years.

The launch of the programme follows a study undertaken jointly by AfDB and the ILO that identified lack of collateral as a key constraint to accessing credit for women enterprises in Kenya. IFC Advisor of financial markets Mr Nderitu Mureithi said the partial guarantee facility will be extended through three local banks — CFC, Commercial Bank of Africa (CBA) and K-Rep Bank. This will be coupled with a technical assistance facility to enhance the management and capacity of the GOWEs in order to support the growth of businesses.

"The programme is expected to fill the SME financing gap and support the long-term development and management of adequate financial services by local financial institutions," Mureithi said.

To be eligible, businesses must be formally registered women-owned enterprises that have demonstrable growth potential. Others include umbrella women entrepreneur associations and local business development service providers.

Loans requested must be between $20,000 and $400,000 (Sh1.4 million to 28 million) and the business owner will be expected to contribute 20 per cent of the project costs.

To have their loans guaranteed, business owners will be expected to present their business plans to any of the participating banks. The institutions will then carry out a due diligence — an investigation or audit — to determine their feasibility and viability. The partner banks will then approve loans based on their internal procedures but within the limits set in the eligibility criteria agreed with AfDB.

Source: The Standard