Need Supporting Access to Finance and Enterprise Recovery (SAFER) from Kenya Development Corporation (KDC)
Kenya Development Corporation (KDC) in partnership with The National Treasury and the World Bank Group (WBG) are spearheading the Supporting Access to Finance and Enterprise Recovery (SAFER) project in Kenya. This project seeks to address market failures in access to finance by MSMEs that have been hard hit by the COVID 19 Pandemic. It is a post COVID 19 intervention.
Activities under this project are structured in three components;
- Innovation and liquidity support; €47.245 Million
- De-risking lending to MSMEs; €25.77 Million
- Technical Assistance and Project Management; €12.885 Million
KDC is the Apex financial institution that is handling Component 1. This entails wholesale lending to regulated Participating Financial Institutions (PFIs) who are focused on MSMEs.
The financing is offered under the product name; Nawiri Wholesale loan
Nawiri Wholesale loan targets viable MSMEs that were previously financed but are facing constraints in addition to those that are considered bankable but have been unable to access credit.
Areas of Focus
- Savings & Credit Cooperatives regulated by the SACCO Societies Regulatory Authority (SASRA)
- Microfinance Banks Regulated by CBK
- Tier III Commercial Banks focusing on MSME lending
Key Features
- Amount: KES 10 Million – KES 500 Million
- Tenure: 60 – 120 months
- Moratorium on principal of up to 12 months
- Repayment: Monthly, Quarterly or Semi-annually
- Security: Floating Debenture on the PFI’s loan book or an alternative acceptable collateral where available
- Drawdown: 2 tranches dependent on absorption capability of the PFI
- Interest rates between 7% - 9%
- Appraisal fee 0.75% paid upon approval
- Additionality where KDC works with the financing institution to build an MSME/SME portfolio
Application Requirements
- A formal application letter for a facility
- Board Resolution to borrow from KDC
- Company profile & current Strategic plan
- Pricing criteria for MSME loans
- Copies of key policies and operational documents – Credit/lending policy, Risk policy, & latest AGM pack
- Copy of certificate of incorporation/ registration
- Copy of Memorandum & Articles of Association (CR2)
- Copies of company PIN, CR12, & Tax compliance certificate
- Copy of latest annual returns
- Copies of ID, PIN, & 2 recent colored passport photographs of Directors
- Audited financial statements for the last 3 years, & Management accounts for the current financial year
- Proposed collateral for the facility
- Copies of relevant GoK licenses, & evidence of regulatory compliance
- Demonstration of co-funding ability for the new MSME portfolio to be generated
