Bank signs deal to finance small firms

Nigerian-based lender UBA Bank has signed a partnership agreement with the African Trade Insurance Agency to finance and cover trade.

Under the deal, the pair will provide insurance to qualified UBA Group transactions, cushioning investors from a range of political risks, among others.

It joins a host of other financial institutions — both local and international — battling for a share of the SME lending in Kenya. UBA Africa deputy managing director Kennedy Uzoka said the bank, which has a strong presence in Africa, understood the entrepreneurs’ challenges and would facilitate an increase in intra-Africa businesses.

CHEAPER CREDIT

“With a presence in 19 countries on the continent, we understand Africa’s problems. We are looking to spread the risk across the continent and in return make it cheaper to access credit for traders,” said Mr Uzoka at the signing ceremony in Nairobi on Monday.

“The risk mitigation services will provide an alternative to collateral for UBA’s corporate clients, who may otherwise face financial constraints in obtaining credit, while also protecting them against cross-border trade risks and a broad range of investment risks,” said the bank.

There is a growing interest in financing SMEs in the country with a number of companies having moved in to introduce tailor-made financial services suitable for the sector.