NCBA, AGF renew $23m SME financing deal

NCBA has announced the renewal of its partnership with the African Guarantee Fund (AGF), enhancing their collaboration with a KES 3 billion ($23 million) guarantee agreement aimed at supporting small and medium enterprises (SMEs) across Kenya.

The renewed partnership will span ten years and places a special emphasis on women-led businesses and environmentally sustainable sectors.

The partnership, which began over a decade ago, has enabled NCBA to disburse nearly KES 17 billion in loans. Through AGF’s risk-sharing mechanism, AGF has supported 696 SMEs, accounting for more than 3,500 transactions and a total of KES 8 billion in loans. The current outstanding portfolio stands at KES 1.7 billion. So far, the collaboration has generated 7,200 jobs, including 2,200 for women and 4,100 for youth.

At the signing ceremony, John Gachora, Group Managing Director of NCBA, underscored the strategic importance of the partnership. “This enhancement of our guarantee limit is a testament to our ongoing commitment to the SME sector, particularly businesses that champion sustainable practices, especially those led by women,” Gachora said. He added that the increased guarantee would allow NCBA to provide more flexible, long-term financial solutions to help SMEs grow and contribute to Kenya’s economic development.

In line with its dedication to women entrepreneurs, NCBA also reiterated its support for financial inclusion at an International Women’s Day dinner in Kapsabet. The Group highlighted its efforts to equip women-led businesses with tailored financial solutions, business education programs, and strategic partnerships.

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As part of the renewed agreement, AGF will also provide a Capacity Development grant to NCBA. This funding will enable NCBA to expand its lending capacity to women-led SMEs by building a pipeline of credit-ready businesses.

Jules Ngankam, CEO of AGF, emphasized the broader significance of the partnership. “This collaboration is crucial in our mission to support SMEs, which make up nearly 98% of all businesses in Kenya and create over 30% of jobs annually,” he said. Ngankam also noted that the partnership aligns with AGF’s broader goals, particularly through the Affirmative Finance Action for Women in Africa (AFAWA) program and its Green Guarantee Facility, which promotes sustainable, green initiatives.

In addition to this partnership, NCBA actively promotes sustainability through mentorship programs for women and youth and dedicates at least 30% of its procurement to these groups. The Group has also invested KES 6.5 billion in green financing and women’s empowerment, in line with its “Change the Story” agenda. NCBA further supports community development with an annual investment of KES 150 million in education, sports, and environmental sustainability projects.