Sumac Microfinance Bank and Jitegemea Credit Scheme are the first among the microfinance institutions in Kenya to be selected for a share of a Credit Rotation Fund (CRF) which was set up recently by the Association of Microfinance Institutions in Kenya (AMFI-Kenya) and German Sparkessenstiftung Eastern Africa [DSIK].
“The objective of the Credit Rotation Fund is to provide low-interest loans to financially sound and compliant institutions of the microfinance sector as additional liquidity to meet the demand for loans of clients during and after the COVID–19 pandemic with the aim of mitigating the negative impacts on their businesses,” says AMFI-Kenya CEO Caroline Kabui Karanja.
Eligible microfinance institutions will have the opportunity to repeatedly apply for loans from the fund, to contribute to the support of economic activities in Kenya especially the establishment and development of MSMEs (Micro, Small and Medium Enterprises).
“For this reason, AMFI-Kenya has selected Sumac Microfinance Bank and Tegemea to be the first among the microfinance institutions to benefit from this fund,” Caroline Says.
During a signing ceremony at AMFI-Kenya headquarters in Nairobi, Sumac Microfinance Bank CEO John Njihia noted that that the fund will go a long way to assist some of the bank’s MSME and agribusinesses clients who had been adversely affected by the Covid-19 pandemic.
“We seek to cushion our clients in the best way possible, and this fund couldn’t have come at a better time for us,” Mr. Njihia said. “We are committed fully to ensuring we help the many businesses that have truly struggled in the last one year or so.”
On his part, DSIK Country Director Tonny Otieno pledged full support to microfinance institutions in Kenya in this regard, whilst noting that DSIK was absolutely committed to helping businesses in Kenya to get back on their feet.
“We are keen to see businesses emerge from the ruins of Covid-19 pandemic, and that is why we set up this fund in partnership with AMFI-Kenya,” Mr. Otieno Said. “DSIK will work with all financial institutions in Kenya to provide the needed funding to push this agenda in foreseeable future. Our partnership with AMFI-Kenya will go a long way to help secure these objectives.”
Jitegemea Credit Scheme CEO Laban Hihu Mwangi was all smiles as he put pen to paper. “This Credit Rotation Fund is crucial to the microfinance sector, and we are delighted to be among the first two microfinance institutions to be selected for a share of the fund,” he said. “Our goal is to continue offering affordable credit to our clients, and with this gesture, we will have the muscle to help the many clients who have been victims of the Covid-19 pandemic.”
DSIK Country Director Otieno is hopeful that the CRF will grow exponentially in order to benefit all Microfinance Institutions and their clients. “Beyond that, we hope to attract more partners to the Fund in order to have a broader mandate and capacity to help financially strengthen businesses in the country.”
Article by: By Oliver Owuor