Leading Microfinance Bank, Faulu Kenya in partnership with Siaya County Government has initiated an ambitious multisectoral drive whose objective is to grant the traders in the informal sector, particularly traders in Siaya and the larger Lake Victoria region, easy access to credit to boost the county economy by eliminating stringent requirements by allowing alternative means of collateral security.
This is a departure from the conventional formal collateral security that includes land, property and share certificates among others. The Bank has invested over Kshs270million towards the initiative.
The multisectoral financing drive will offer the requisite flexibilities for repayment schedules by cashflows of the respective trade sectors. Traders in the fish farming value chain to use their fishing nets, boats, engines, cages as collateral to access credit facilities to purchase modern fishing equipment. The agribusiness sector accounts for 61% of the employment opportunities in the county. The bank is facilitating access to credit for quality farm inputs to increase the chances of bumper harvests coupled with crop insurance as collateral for unforeseen eventualities that would affect the yield.
The recent partnership with Car and General to offer credit for boda boda motorbikes augments the development of the transport sector in the county. The move is expected to complement the county government initiatives and stimulate growth of the county economy while also creating job opportunities for the youth and 40% (172,120 persons) of the unemployed labour force in the county.
Speaking at an event to formally launch the new branch in Ugunja, Siaya, Faulu Bank Managing Director Mr. Apollo Njoroge said: “Lack of finances to fund working capital has for long been a key barrier to entry for a majority of the youth wishing to engage in Income generating activities because of the stringent requirements when it comes to lending from the formal banking sector”.
The event was graced by Siaya County Governor, Cornel Amoth Rasanga. Faulu is set to open another branch in Bondo in the coming days.
He added: “Faulu is looking to empower the local traders with easy access to credit and we believe this will not only create job opportunities for the youth but also increase the per capita income for the households in the county”.
In his inaugural speech during the branch opening in Ugunja, the Siaya County Governor, Cornel Amoth Rasanga said “Faulu is indeed positioned well to mine the untapped potential in the county through the community banking model and financial education pillar, to boot sorghum farming and the boda boda transport business to empower the youth”
“Faulu Microfinance Bank has strategically aligned its business model to provide a wide range of financial services and attract diverse customers, amongst target segments being Personal, Business/SME, Community banking segments and Bancassurance,” added Mr. Njoroge.
The Bank recently announced plans to expand its branch network in a strategic move that will see it grow its presence across the country and increased grassroots reach in the counties.
The initiative will see it open eight new branches in Homabay, Kericho, Busia, Voi, and Limuru. The Bank is also set to upgrade marketing offices to sales and service centers in Taveta, Emali, Iten and Kimilili to enable the hubs offer a wide range of products and services to clients.
Additionally, the Bank has embarked on a mission of refurbishing 15 branches across the country as part of its Shs113million branch expansion and upgrade programme