We all agree the past few years/months, our operating environments have not all been rosy in the post-pandemic era. Businesses globally and locally continue to face the brunt of global disruptions.
The consistent slump of the Kenya shilling against world majors, which has shed over 19 percent of its value against the dollar since January, has for instance thrown into disarray many small businesses dependent on imports.
The weakening of the shilling and rising energy prices have coincided with a rise in the cost of credit, piling significant pressure on the margins and cash flows of small businesses. The introduction of new taxes on both individuals and businesses has played a double-edged sword role, increasing operating costs while also weakening the purchasing power of Kenyans. As a partner for growth, Absa recognizes its pivotal role in enabling MSMEs to navigate uncertain times. The bank has adopted a four-pronged approach that encompasses access to markets, access to information, access to mentorship and coaching, and access to sustainable finance.
In October 2023, Absa launched two initiatives aimed at helping these small businesses grow and recover. It launched a new digital platform called Wezesha Stock, which seeks to boost inventory management and trading for SMEs. Wezesha Stock, a real-time digital platform, automates stock financing for retailers to complement their financing needs.
It also provides the capability to onboard retailers, manage stock orders, and unlock access to unsecured stock financing for retailers using data analytics.
Speaking during the launch of the solution, Absa Bank’s Managing Executive, Corporate and Investment Banking James Agin noted the solution is relevant and timely for both corporates and SMEs as it provides a credit line that specifically meets the inventory needs of distributors and retailers, thereby enhancing their liquidity and business growth prospects.
“Compared to conventional business loans, Wezesha Stock enables our customers to access working capital at competitive interest rates with no collateral required, setup or processing fees, based on prequalified limits that are premised on an individual historical sales data profile, in line with the Risk Based Lending model, to provide continuity and scalability for their businesses,” said Agin.
Under Wezesha Stock, Absa Bank Kenya will provide automated credit of between KES 100,000 and KES 10 million to businesses dealing in Fast Moving Consumer Goods, agro-processing, oil marketing, and agrochemicals.
The launch of Wezesha Stock is a major boost to Kenya’s wholesale and retail trade sector which accounts for close to 8 million jobs, more than half of all jobs created by the MSME sector in Kenya, according to the Kenya National Bureau of Statistics.
On top of Absa’s Wezesha Stock, the bank also committed Ksh. 100 billion shillings in funding to spur the development of MSMEs across various value chains over the next three years. The funding line will improve the resilience of the sector by offering ready access to working capital, further cementing the Bank’s role in catalyzing Kenya’s economic growth and development.
With its additional support to customers in terms of capacity building, mentorship, and networking opportunities, Absa Bank Kenya is fulfilling its purpose of bringing possibilities to life for its customers and society at large.
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