In a move that promises to transform Kenya’s entrepreneurial landscape, NCBA Group has renewed its strategic partnership with the African Guarantee Fund (AGF) by enhancing its credit guarantee facility to KES 3 billion for a period of 10 years. This renewed pact is designed to empower small and medium enterprises (SMEs), with a special focus on women-led businesses and green initiatives, by providing long-term, inclusive financial support. The collaboration marks another milestone in a relationship that spans over 12 years, reflecting both institutions’ unwavering commitment to nurturing the backbone of Kenya’s economy.

A Commitment to Financial Inclusion and Sustainable Development

The renewed deal is an important step in broadening access to finance for the underserved SME sector, which accounts for almost 98% of all business activities in Kenya and generates more than 30% of the country’s jobs annually. Under this enhanced guarantee arrangement, NCBA has cumulatively disbursed close to KES 17 billion in loans through its tailored credit solutions, benefiting nearly 696 SMEs over more than 3,500 transactions. To date, these initiatives have generated approximately 7,200 jobs—2,200 of which specifically target women entrepreneurs, while youth employment accounts for around 4,100 positions.

By integrating risk-sharing mechanisms provided by AGF, NCBA aims to reduce the inherent vulnerabilities associated with SME lending. With this increased support, the banking group plans to deepen its commitment to offering flexible and long-term financing solutions. The gesture is expected to play a pivotal role in driving growth across Kenya’s diverse economic sectors, particularly in areas such as renewable energy, sustainable agriculture, and technology-driven services.

Empowering Women-Led Enterprises and Green Projects

NCBA’s renewed collaboration with AGF goes beyond simple financing—it is part of a broader mission to foster an inclusive and sustainable economic environment. During the signing ceremony, Group Managing Director John Gachora stated, “This strategic partnership with AGF is proof of our devotion to SMEs, particularly those spearheading sustainable practices led by women. By increasing our guaranteed limit, our capacity to offer more flexible, long-term financial solutions that support SME growth will contribute to economic growth.”

For years, women entrepreneurs have encountered unique challenges in accessing credit facilities due to stringent collateral requirements and higher perceived risks. NCBA and AGF’s collaboration specifically addresses these challenges by channeling funds through programs like the Affirmative Finance Action for Women in Africa (AFAWA), empowering women-led businesses with improved access to capital. Through targeted capacity development grants, NCBA intends to build a pipeline of credit-ready women-led SMEs. This not only gives women access to finance but also provides them with business education and mentorship opportunities that enhance their operational capabilities and competitiveness.

The renewed pact will also support green initiatives, aligning with AGF’s Green Guarantee Facility. By directing support toward projects in renewable energy and sustainable agriculture, the partnership is poised to contribute to a cleaner, more sustainable economy. In an era where environmental challenges are increasingly interlinked with economic stability, such forward-thinking financial solutions ensure that economic growth does not come at the expense of ecological health.

The Impact on Kenya’s SME Landscape

Kenya’s SMEs are recognized as the engine of its economy, driving innovation, creating jobs, and contributing significantly to GDP. Despite their importance, many of these enterprises struggle with limited access to affordable credit due to high perceived risks by traditional lenders. This renewed KES 3 billion guarantee is expected to bridge that gap by absorbing some of the risks associated with lending to small-scale businesses. AGF’s robust risk-sharing mechanism offers an attractive incentive for banks like NCBA to extend credit facilities to SMEs that would otherwise be deemed too risky.

To date, NCBA’s partnership with AGF has facilitated the disbursement of loans amounting to KES 17 billion, a testament to the program’s effectiveness. With outstanding credit facilities currently valued at KES 1.7 billion, the partnership’s expansion is anticipated to increase this number significantly. More importantly, the broad spectrum of supported transactions underscores the ability of this financial model to adapt and benefit various sectors—from manufacturing and agribusiness to tech start-ups and service industries.

Creating Jobs and Driving Social Change

One of the standout achievements of this partnership is its contribution to job creation. Generating approximately 7,200 jobs so far, the initiative has had a direct impact on livelihoods across the country. For many families, especially those led by women and young entrepreneurs, these new opportunities mean improved financial independence and a pathway out of poverty.

The role of job creation in driving social change cannot be overstated. In an economy where unemployment and underemployment remain significant challenges, initiatives that offer sustainable jobs can have profound ripple effects on community well-being. The jobs created under this scheme have not only provided income but have also helped in uplifting local economies by increasing spending power, which in turn drives demand for other services and products.

Capacity Building and Financial Literacy: The Human Element

Beyond the numbers and financial guarantees lies a critical human element—capacity building and financial literacy. NCBA’s commitment to advancing financial inclusion goes hand in hand with its efforts to empower entrepreneurs through business education. At a recent International Women’s Day dinner in Kapsabet, the Group reaffirmed its dedication to providing tailored financial solutions and strategic partnerships that include extensive business education programs. This approach ensures that entrepreneurs are not only given access to finance but are also equipped with the skills necessary for long-term success.

Capacity development grants provided by AGF to NCBA will enhance the Group’s ability to manage and extend credit, particularly to underserved segments such as women-led SMEs. This strategic move is essential because a well-informed entrepreneur is more likely to navigate challenges successfully, leading to higher survival rates and sustained business growth. The sharing of knowledge and best practices through mentorship and training sessions exemplifies how financial institutions can play a transformative role in fostering entrepreneurship.

Aligning with Global Trends

NCBA’s efforts to expand its SME and women-led enterprise support are in line with global trends emphasizing inclusive growth and sustainable development. International financial institutions and development banks have increasingly focused on SMEs as crucial players in global economic recovery, particularly in emerging markets. These institutions recognize that by equipping SMEs with appropriate financial tools and technical know-how, entire economies can be revitalized.

Furthermore, the emphasis on green financing reflects a worldwide shift towards sustainable business practices. As climate change becomes an ever-pressing concern, investors and policymakers are paying closer attention to financial instruments that promote environmental sustainability. NCBA’s active involvement in green projects—backed by its partnership with AGF and complementary initiatives like its KES 6.5 billion green financing deal with Proparco—demonstrates a keen alignment with these global priorities.

The incorporation of green initiatives is particularly relevant given Kenya’s ambitious energy and environmental targets. As the country looks to diversify its energy mix and reduce its carbon footprint, access to finance for renewable energy projects and sustainable agriculture becomes increasingly critical. The renewed pact not only supports existing projects but also opens the door to new investments in these sectors, paving the way for a more resilient and eco-friendly economic future.

Strengthening Inclusive Economic Growth

Inclusive growth is at the heart of NCBA and AGF’s renewed partnership. By ensuring that SMEs and women-led enterprises have access to the financial resources they need, the program aims to level the playing field and create opportunities for a broader cross-section of society. Traditional lending practices have often marginalized these groups, but with the innovative guarantee mechanism and capacity building measures in place, financial inclusion is set to improve markedly.

“This partnership has been a valued component of our mission for over 12 years,” remarked Jules Ngankam, Group Chief Executive Officer of AGF. “Our collaboration with NCBA has enabled us to support SMEs that shape the future of Kenya’s economy. With the enhanced guarantee facility, we can extend our reach even further, ensuring that more women and youth-led enterprises access the capital they need to thrive.”

By integrating social empowerment with financial solutions, NCBA and AGF are creating a model of development that prioritizes the welfare of communities. The emphasis on inclusive financing ensures that economic growth is not concentrated in a few hands but is distributed widely, improving quality of life and reducing income disparities across the country.

The Broader Impact: From Local to National Transformation

The ripple effects of this renewed pact extend far beyond the immediate beneficiaries. SMEs form the backbone of Kenya’s economy, and by stimulating growth in this sector, the benefits are felt nationally. Increased investment in SMEs can lead to higher tax revenues, which in turn can be reinvested in public services such as healthcare, education, and infrastructure development. Moreover, a thriving SME sector fosters innovation, increases competition, and encourages productivity—all of which contribute to a more dynamic and resilient economy.

For instance, enhanced access to finance can enable small businesses to invest in new technologies, improve their operational efficiencies, and compete both locally and internationally. This kind of economic dynamism is essential for Kenya as it seeks to transition from a resource-dependent economy to one characterized by value-added industries and technological innovation.

Furthermore, the focus on women-led businesses is expected to have long-term social benefits. Empowered women are more likely to invest in the health and education of their families, creating a virtuous cycle of improved well-being and higher productivity. By supporting female entrepreneurs, the partnership not only contributes to economic growth but also promotes gender equality and social progress.

Real Stories of Transformation

Behind the figures and financial guarantees lie real stories of transformation. Consider the story of a young woman entrepreneur in Nairobi who started a small agro-processing business but struggled to secure affordable credit due to stringent lending requirements. Through the support provided by NCBA and AGF’s guarantee facility, she accessed the funds needed to expand her operations, hire more staff, and ultimately, supply her products to local markets. Her success story is not unique—across Kenya, numerous SMEs are experiencing similar turnarounds, thanks to enhanced access to finance and tailored business mentorship programs.

These personal narratives highlight the tangible impact of the renewed KES 3 billion pact. For many entrepreneurs, this support means the difference between stagnation and growth, between missed opportunities and a promising future. The comprehensive approach adopted by NCBA—combining financial guarantees, capacity development, and mentorship—ensures that the benefits of the partnership are both immediate and far-reaching.

A Future Defined by Collaboration

The NCBA-AGF partnership exemplifies the power of collaboration in driving economic growth and social transformation. By pooling their resources and expertise, these institutions are not only providing critical financial support but are also setting a benchmark for how public and private sector partnerships can foster inclusive, sustainable development. The success of this initiative depends on ongoing collaboration among banks, guarantee funds, government bodies, and community organizations, all working together towards a common goal.

Looking ahead, the enhanced guarantee facility is expected to unlock new opportunities for SMEs across Kenya. With a stronger financial safety net and tailored support mechanisms, businesses will be better positioned to innovate, grow, and compete in an increasingly dynamic global economy. The renewed pact represents a bold vision for the future—one in which economic opportunities are accessible to all, and where sustainable growth is built on the foundation of inclusivity and resilience.

Conclusion: Changing the Story for Kenya’s SMEs

The renewal of the KES 3 billion guarantee pact between NCBA and AGF marks a transformative moment for Kenya’s SME sector and women-led enterprises. By providing a robust financial framework that combines risk-sharing, capacity building, and targeted support for green projects, the partnership is set to redefine the trajectory of small business financing in Kenya. It is a strategic, human-centered approach that embraces the diversity of Kenya’s entrepreneurial landscape and prioritizes long-term, inclusive growth.

As NCBA and AGF move forward with the enhanced facility, the real measure of success will be seen not only in numbers but also in the lives improved, jobs created, and communities strengthened. In a country where SMEs are the lifeblood of the economy, such initiatives are crucial for bridging the gap between opportunity and access, between ambition and achievement.

In today’s rapidly evolving economic environment, where financial inclusion and sustainable development are paramount, the renewed pact is more than a financial agreement—it is a commitment to change the story for Kenya’s SMEs. With dedicated leadership, strategic investment, and an unwavering focus on empowering women and youth, this initiative has the potential to spark a new era of prosperity. It reminds us that when institutions come together to support the underdog, the rewards are measured not just in profits, but in the vibrant, inclusive growth that transforms communities and builds a brighter future for all.

The story of NCBA and AGF is a powerful example of how collaborative partnerships can address systemic challenges and unlock opportunities for sustainable development. By nurturing the engines of entrepreneurship and empowering those who have long been marginalized, Kenya is taking a significant step toward a more inclusive and resilient economy—one that will serve as a model for the entire region.

Ultimately, the renewed KES 3 billion pact represents a beacon of hope for countless entrepreneurs across Kenya. It is a testament to the transformative power of finance when channeled with vision and purpose—a commitment to not only change the narrative for SMEs, women-led enterprises, and green projects but to empower them to drive the nation’s economic future.

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photo source: Google

By: Montel Kamau

Serrari Financial Analyst

8th April, 2025