Co-op Bank, Laikipia County partner to launch an Enterprise Fund

– The fund kicked off its operations today and envisions offering affordable financing and business support to co-operatives and entrepreneurs in Laikipia county

– It targets supporting at least 7,000 entrepreneurs in the devolved unit to recover from the economic downturn caused by COVID-19 pandemic

– The fund will be providing loans to successful applicants at an interest rate of 7.1% annually down from 12.1%

– Borrowers will also enjoy a reduced appraisal fee at 1.5% of the approved loan amount

Laikipia County Government and the Co-operative Bank of Kenya (Co-op Bank) on Monday, July 6, launched the Laikipia Enterprise Fund with an initial kitty of KSh 300 million.

The fund is aimed at offering affordable financing and business support to co-operatives and entrepreneurs in Laikipia county.

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The fund kicked off its operations on Monday, July 6. Photo: UGC.
Source: UGC

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To kick-off the Fund, the bank and the county government have entered into an Interest-Sharing and Guarantee Arrangement aimed at supporting two key segments.

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.

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Second, 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.

Borrowers will pay single-digit interest rates, which makes this arrangement perhaps the most affordable lending program in Kenya today.

The bank pumped into the enterprise initial funding of KSh 300 million. Photo: Co-op Bank.
Source: UGC

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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% thus reducing the bank lending rate from 12.1% to 7.1% annually for all borrowers.

In addition, borrowers will enjoy a reduced appraisal fee at 1.5% 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.

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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.

Laikipia Enterprise Fund commences operations on Monday, July 6.

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