Laikipia County Government and the Co-operative Bank of Kenya (Co-op Bank) have today launched the Laikipia Enterprise Fund. The fund has been launched with an initial kitty of Ksh. 300 million. The fund will offer affordable financing and business support to co-operatives and entrepreneurs in Laikipia County.
“The bank and the county government have entered into an Interest-Sharing and Guarantee Arrangement. Â This is aimed at empowering co-operatives in Laikipia County through affordable financing and Consultancy Services, to enable them have sufficient liquidity for lending to members, and strengthen their management structures, and support over 7,000 entrepreneurs in Laikipia County recover from the challenges of the Covid-19 Pandemic by way of affordable financing and training,” Co-op Bank said in a statement.
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Borrowers will pay single-digit interest rates on the loans. This means that Laikipia borrowers will get the loans at the most affordable rates in Kenya today. “The low interest rate has been made possible by the interest-sharing arrangement, whereby the Laikipia County Government will be offering an interest subsidy of 5 per cent, thereby reducing the bank lending rate from 12.1 per cent to 7.1 per cent per annum for all borrowers,” said Co-op Bank.
In addition, borrowers will enjoy a reduced appraisal fee at 1.5 per cent of the approved loan amount. Co-op Bank will match three times the amount that the County Government will place in the Enterprise Fund, to ensure as many borrowers benefit from the opportunity. In addition to financing, the bank will make available the full basket of services that include digital banking tools, workshops for business training, and capacity-building consultancy services for co-operatives.
Repayment period for the loans will be up to 12 months for SMEs and up to 18 months for co-operatives. “The county government shall undertake initial vetting of loan applicants as provided for in the Laikipia County Enterprise Fund Regulations 2020. Co-op Bank will further appraise for qualification,” said Co-op Bank. The Laikipia Enterprise Fund has already commenced operations.