Sidian Bank signs US$9m deal with Oikocredit for SME lending in Kenya

KENYA – Sidian Bank, a mid-tier bank focusing on Small and Medium Enterprises (SMEs) in Kenya has signed US$9 million deal with the Netherlands-based social impact investor, Oikocredit.

The bank secured a funding deal that will enable the bank to support onward lending to the SME sector in Kenya.

The funding will be utilized to support the bank’s growth plans to further its strategy of providing affordable credit to its SME clients and privately-owned business enterprises as it works towards empowering entrepreneurs to realize their potential through providing tailor-made financial solutions. 

Sidian Bank has been at the forefront of providing financial solutions to the SME sector in the economy through shaping, developing and addressing the needs of entrepreneurs.

Speaking at the signing ceremony, Chief Executive Office of Sidian Bank Chege Thumbi said: “I am delighted with the direction that the bank is taking. This is yet another footprint of the bank’s strategic initiative to be the preferred bank for trade finance solutions and SMEs, especially in view of the impact of the pandemic on SME businesses. We intend that the success of this partnership will impact SMEs ranging from small, medium and large.”

Oikocredit which is a social impact investor and worldwide cooperative has over four decades of experience in promoting sustainable development through investments and focuses on investments around financial inclusion, agriculture and renewable energy.

“This investment will enable the bank to lend more and thus contribute to the creation of sustainable jobs, which is in line with the mission of Oikocredit to create lasting social impact on the low-income sections of the society”

Caroline Mulwa - Oikocredit Investments Manager, East and Southern Africa Tweet

During the signing, Oikocredit’s Investments Manager, East and Southern Africa Caroline Mulwa noted that Oikocredit is excited to be part of Sidian Bank’s Growth, an institution that has demonstrated the ability to package trade solutions to the emerging SME clientele.

“This investment will enable the bank to lend more and thus contribute to the creation of sustainable jobs, which is in line with the mission of Oikocredit to create lasting social impact on the low-income sections of the society. During the investment period, Oikocredit will work with the bank to mainstream social impact and its measurement into its lending activities.”

According to our estimates, 600 million jobs will be needed by 2030 to absorb the growing global workforce, which makes SME development a high priority for many governments around the world.

In emerging markets, most formal jobs are generated by SMEs, which create 7 out of 10 jobs.

However, access to finance is a key constraint to SME growth, it is the second most cited obstacle facing SMEs to grow their businesses in emerging markets and developing countries.

 

Oikocredit invests in Victory Empowerment Centre

Meanwhile, Oikocredit has invested US$500,000 in Victory Empowerment Centre, an NGO focused on improving the living conditions of disadvantaged women through innovative and flexible microfinance services.

The loan will support micro entrepreneurs in improving their businesses and livelihoods and will serve as a conduit for economic empowerment. Oikocredit’s investment is the first international investment that Victory Empowerment Centre has obtained.

Uzoma Emmanuel Nwazuoke, CEO, Victory Empowerment Centre: “Oikocredit’s loan will help reach more of our deserving clients at the bottom of the pyramid. With this loan we will help our existing and new clients to scale up their businesses and improve their socio-economic condition.’’

Ufuoma Eghwerehe, Oikocredit’s Country Manager for Nigeria said that they were delighted to support a small microfinance institution like Victory Empowerment Centre and are proud to be their first international lender.

“Our partnership will help provide the much needed micro loans to micro, small and medium enterprises in Nigeria, increasing their access to finance in these challenging Covid-19 times,” he added.

“It will also help Oikocredit’s strategic focus on promoting financial inclusion and economic development in Africa, while achieving a higher social impact in the communities we serve.”

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