Kenya Development Corporation (KDC) has lent Ksh300 million in low-cost credit to Murang’a-based Amica Sacco for lending to farmers and micro-traders.
The Sacco, which primarily serves farmers and small businesses, will provide loans ranging from Ksh7,000 to Ksh250,000 at a single-digit interest rate to meet working capital needs.
The loans are funded by the Ksh8 billion Supporting the Access to Finance and Enterprise Recovery (SAFER) initiative under KDC, which is backed by the World Bank.
“The facility will enable Amica Sacco to provide crucial support to local businesses as they recover and expand, spark economic activity, and drive overall community prosperity,” said Norah Ratemo, KDC Director-General.
The Director noted that the private sector’s credit growth has been slow in recent months due to a sluggish economy and rising loan rates forcing lenders to reduce lending to high-risk sectors which include small and micro businesses.
Under SAFER, individual traders can access loans ranging from Ksh7,000 to Ksh150,000 while micro-enterprises can obtain credit between Ksh150,001 and Ksh250,000 – both loans are repayable over a three-year period.
Also present at the event was Murang’a Governor Irungu Kang’ata.
She said that KDC aims to provide billions in loans to small and medium-sized businesses, leveraging funds sourced from entities like the World Bank and EXIM Bank.
“The government is dedicated to avail affordable credit facilities to SMEs. Currently, more than 7.4 million Kenyans are engaged in the sector,” Cabinet Secretary (CS) for Trade Salim Mvurya said.
He also noted that the KDC facility will enhance agricultural productivity and value addition in Murang’a.
James Mbui, Amica Sacco CEO pointed out that since majority of the country’s economy operates within the informal sector where many small businesses depend on loans from friends and family, the Ksh300 million investment will increase the availability of affordable credit for micro-enterprises.
By Vostine Ratemo
Get more stories from our website: Sacco Review.
For comments and clarifications, write to: Saccoreview@
Kindly follow us via our social media pages on Facebook: Sacco Review Newspaper for timely updates
Stay ahead of the pack! Grab the latest Sacco Review newspaper!
