The Trade Finance Line of Credit will enable Family Bank to provide financing to eligible small and medium-sized enterprises and local companies.
Businesses operating in manufacturing, agriculture, healthcare and renewable energy will be prioritised alongside enterprises owned by women.
The facility will help companies finance imports and purchase equipment, raw materials and other productive inputs required for business operations.
The AfDB said the financing would also help Kenyan companies participate more effectively in domestic, regional and international value chains.
The agreement was signed at AfDB’s East Africa Regional Office on October 2. “A line of credit becomes meaningful only when it becomes a line of opportunity for a business,” AfDB East Africa Director-General Alex Mubiru said.
“Through Family Bank’s local reach, we expect this facility to support enterprises that are producing, trading, creating jobs and strengthening Kenya’s value chains.”
Trade finance can help businesses address foreign-currency shortages and cash-flow gaps between purchasing supplies and receiving payment for finished goods.
Smaller businesses frequently struggle to secure trade finance because of limited collateral, shorter operating histories and the perceived risks associated with cross-border transactions.
The partnership is expected to use Family Bank’s domestic network and knowledge of the Kenyan market to direct financing towards eligible businesses.
AfDB said the facility would support the diversification of Kenya’s productive capacity by expanding financing beyond established large companies.
Improved access to productive inputs could enable businesses to increase output, create employment and expand into regional markets.
The facility is also intended to increase trade among African countries under the African Continental Free Trade Area.
By supporting businesses involved in production and cross-border commerce, AfDB and Family Bank aim to strengthen regional supply chains and reduce barriers limiting Kenyan participation in continental trade.
The institutions said the value of the facility would ultimately be determined by the number of businesses able to convert the financing into production, trade and employment opportunities.
–AfDB/ChannelAfrica–
