Barclays bank has pumped Sh.300 million to offer an alternative financing model for Small and medium enterprises to do business with larger corporates.
The model is under the new Barclays Enterprise & Supply Chain Development program.
To support the program this year, the bank has set aside a KES 150 million with a provision to increase the amount should there be more demand.
Through the ESD program, Barclays will finance SMEs supplying goods and services to big corporates on the basis of a valid contract, thus enabling them to grow and make a bigger contribution to the economy.
“One of the unintended consequences of the interest rate capping is that banks have been forced to review their lending policies especially to micro and small enterprises due to the high risk associated with these segments. Through this program, we will not only provide funding for the SME’s within the corporate value chain, but also deploy training for entrepreneurs to support their growth” Agin said.
SMEs will access the funds through Barclays existing products including bank guarantees, letters of credit, short term loans, invoice discounting and overdrafts.
Beneficiaries of the program will be identified through the Barclays corporate customers and are not required to be Barclays customers at the on-boarding stage. Further, the small and medium entrepreneurs will enjoy customised non- financial support through workshops & training.
They will also not be required to present their financials and other collaterals to access funding. since the lending under ESD will leverage the bank’s existing relationship with its corporate customers.
The program will also be rolled out on pilot in Botswana, Ghana and Uganda before it is launched across the markets where Barclays Africa operates.