KCB has put pen to paper a loan deal worth Sh2 billion for farmers and businesses in Laikipia county. The loan deal will see a lower interest rate to cushion farmers and businesses against the adverse effects of the Covid-19 pandemic.
Under the Laikipia County and KCB partnership, the arrangement targets 5,000 SMEs and 180 cooperative societies. Part of the plan is to see these entities access the Sh2 billion loan as cheap credit for financing. Societies expect to enjoy six percent as interest rate, a drop of five percentage points from the market rate. SMEs stand to acquire the interest, with 7.5 percent charged for the loan arrangement.
“The interest-sharing and guarantee model is one of the innovative ways the bank has developed through a partnership with the county government to facilitate credit to catalyze the entrepreneurs’ business growth and enable economic recovery,” said KCB COO Samuel Makome.
As part of the deal, Laikipia County will provide a guaranteed model to facilitate farmers and businesses getting the loan. This will have the county government offer borrowers a 5 and 6.5 percent grants on the loans. The unique move is set to help defray interest expenses and stimulate economic recovery.