Standard Chartered Bank injected KShs 6.3 billion in direct and indirect lending to Micro, Small and Medium Enterprises (SME) in 9 months to September 2019, supporting more than 8,000 such enterprises in the process, the Bank’s Chief Executive Officer, Mr. Kariuki Ngari has said.
“This reiterates our commitment towards supporting lending to the private sector, particularly the Small and Medium Enterprise sector despite the prevailing capped interest rate regime. As a bank, we appreciate the key role played by the SME sector play in sustained growth of the Kenyan economy and we like to restate our commitment to supporting the SME, and the private sector in general,” Mr. Kariuki said.
Since 2016 following the enactment of the interest rate capping law, the private sector has experienced unprecedented credit crunch. As such, there has been a huge financing gap with most SMEs losing access to credit.
“The repeal of the interest rate cap is a step in the right direction as it allows market forces to determine interest rates and to price risk appropriately. Standard Chartered Bank would, however, like to reassure clients that they will not see a spike in interest rates. Over the last couple of years, we have realigned our business model and massively invested in technology to derive efficiencies which has enabled us to share the savings with our clients,” Mr. Ngari said.
“As Standard Chartered Bank, we hold ourselves to a high standard and commit to act responsibly by doing right by our clients and the communities in which we operate to fulfill our purpose of Driving Commerce and Prosperity through our unique diversity,” he added.
Mr. Ngari said the existing loan facilities will not be repriced following the repeal of the interest rate cap.
“These facilities will continue under the existing loan agreements. We are finalizing plans to roll out a fully-fledged Risk-based pricing model for new facilities, which we will announce in due course,” he said.