Chase Bank will lend Sh60 billion in new loans to small businesses over the next three years and help break stereotypes that some enterprises are not creditworthy. Chief Executive Officer Paul Njaga said the allocation will also cement his middle-sized bank as the lender for up and coming entrepreneurs who now form the most-sought after customer base among commercial banks.
Mr Njaga says that his bank was building on the 20-year experience as a lender for SMEs to extend the new credit facilities to a new crop of entrepreneurs in agribusiness, trade and a specific focus on women in business. “Women are a fantastic group because they are more focused when they get into business,” he said. Mr Njaga was among the speakers at the recently-concluded Global Entrepreneurship Summit in Nairobi and graced by US President Barack Obama.
He was sharing his experience as banker and lender for the small businesses, which he says are responsible for two of every three jobs in Kenya at present. “The situation is not different anywhere in the world, even among the biggest economies.” More than half of Chase Bank’s Sh70 billion worth loan-book has been extended to SMEs he said, with the last three years being the most dramatic in terms of uptake.
Five-year targets in new loans were achieved in two, prompting the bank to embark on capital-raising ventures from strategic investors in Europe and more recently, through a corporate bond floated at the Nairobi Securities Exchange.
Investment arms of the German, French and Swiss governments have collectively taken up about 22 per cent of the bank by acquiring equity stakes while the rest is held by its founder Zafrullah Khan and his close associates.