The Cooperative Bank of Kenya and the Laikipia County government today jointly launched the Laikipia Enterprise Fund as part of efforts to offer affordable financing and business support to co-operatives and entrepreneurs in the county.
To kick-off the Fund with an initial kitty of KSh300 million, the bank and the county government entered into an Interest-Sharing and Guarantee Arrangement whereby the Laikipia county government 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.
In a joint statement on Monday, the parners said that the arrangement will see cooperatives in Laikipia County access affordable financing Consultancy Services, to enable them have sufficient liquidity for lending to members, and strengthen their management structures.
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The deal will also help over 7,000 entrepreneurs in the county recover from the adverse effects posed by the coronavirus pandemic by offering them affordable financing and training.
Borrowers will enjoy a reduced appraisal fee at 1.5 per cent of the approved loan amount.
Co-op Bank promised to match three times the amount that the County Government will place in the Enterprise Fund.
This, the bank said, is 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, ” the statement reads.
The repayment period for the loans will be up to 12 months for Small and medium-sized enterprises (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, ” the statement adds.
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