Co-op loans Laikipia kitty Sh300 million
George Kebaso @Morarak
Co-operative Bank of Kenya has injected Sh300 million initial seed capital to Laikipia Enterprise Fund in a credit deal to help stimulate businesses and co-operatives in the county.
Speaking yesterday during the launch of the kitty, Governor Nderitu Muriithi said the fund is an economic stimulus facility for discounted credit to businesses and cooperatives on the back of Covid-19 shocks.
“Our partnership with Cooperative Bank proposes to enter into an agreement of a Sh300 million facility for provision of business loan facilities to enterprises and the co-operative societies in Laikipia on an interest sharing and guarantee model.
However, the Governor warned, this will not happen overnight hence the support to enterprises.
Interest-sharing model
“As we gradually move towards re-opening of the economy and the norm of living with the reality of Covid-19, there will be great need to support enterprises and businesses to lift themselves up to their pre-Covid-19 levels,” he said.
Vincent Marangu, the lender’s director in charge of Cooperatives Banking Division said the move would kick-off under the interest-sharing and guarantee arrangement to support the county in two ways.
“First, to empower 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 to support over 7,000 entrepreneurs in Laikipia County recover from the challenges of the Covid-19 pandemic by way of affordable financing and training,” he said.
The deal gives borrowers single-digit interest rates made possible by the interest-sharing arrangement, whereby the county 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.
Reduced appraisal fee
Marangu said 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.
“Repayment period for the loans will be up to 12 months for SMEs and up to 18 months for co-operatives,” Marangu said.
