8 banks in Kenya that are transforming how SME’s manage their money

Written by Wellington Ayugi

SME’s are a key driver of economic growth and employment. According to data from KNBS (Kenya National Bureau of Statistics), the sector employs three-quarters of the population and contributes to 45% of Kenya’s GDP. However, lack of adequate financing and business support services have hindered the growth of such businesses. That being said, local banks are looking to fill this existing market gap by tailor making products that cater to the needs of this customer segment.

The innovative products range from business-specific accounts, digital banking systems and a variety of debit and credit cards with attractive rates and features. They also offer other value addition services such as membership to business clubs and networking opportunities. Here is a list of 8 banks in Kenya that help businesses manage their finances and grow their enterprises.

KCB Bank 

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KCB is by far the largest commercial bank in terms of asset value and branch coverage in the country. The bank, which emerged the winner of the SME banking category at the 2012 annual banking awards, has partnered with various institutions to offer a wide range of products for businesses.

Business Accounts

KCB offers a business current account which can be in Kenya shillings or in foreign currency. The zero interest bearing account requires no minimum operating balance and is free to open. You can arrange to transfer money on regular basis from other savings or current accounts.  The account also gives you access to loans and overdraft facilities. It is suitable for enterprises with large volumes of transactions and customers can access their money conveniently through the issuing of cheques.

Extra Financing options

The bank offers temporary overdraft facilities for special situations or, an annual facility for businesses that may require working capital to operate through the year. You can also obtain secure short-term loans for up to Ksh. 50 million, to cover your enterprise needs. The loans have competitive interest rates with flexible repayment periods stretching up to 36 months.

You can also qualify for LPO financing ranging from Ksh. 100,000 to Ksh. 50,000,000, against a purchase order from a reputable institution to deliver them inventory. The approval process for this type of financing is quick with security requirements being flexible.

The bank also offers invoice discounting where your business can receive financing for payments due, on issued invoices. The terms are attractive with competitive interest rates of 2.5% for 3 months, and financing available up to 80% of the face value. The invoices, however, should be from organizations approved by KCB.

Equity Bank

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Equity Bank is one of the leading banks in Africa with a customer base of about 8 million.  The bank has been a  pioneer in the development of agency, SME and mobile banking in the country. The bank’s low margin, high volume model has earned them recognition, key among them an award for the best bank in Kenya Tier 1 for 2013. Here are some products offered that can be of great benefit to your business.

Business Loans

The bank offers specialized loans for businesses to expand their operations and enable them to purchase business assets. These include:

  • Asset Finance Loans:  These loans are provided to businesses for the purchase of motor vehicles, agricultural equipment, construction equipment, office and IT equipment etc. The loans are processed and disbursed within a day or two, and the terms of repayment are quite flexible. There is no maximum limit to what you can borrow as long as you can repay the amount.
  • Eazzy loan:  This product is suitable for businesses as they are not required to fill any forms or produce guarantors. The maximum limit of the loan is Ksh. 3 million. To qualify for the loan you must have an active Equity account for at least 6 months, and have an Equitel line or use EazzyApp. The loan has a repayment term of up to 12 months.

Equity Bank offers EazzyChama, which is an online platform that allows group and Chama account holders to manage their joint activities while maintaining transparency and accessibility among all participants. Members are able to keep track of their contributions, group investments, bank transactions, and monitor expenses. To link your group to this service all you have to do is register on the EazzyChama page.

The bank also offers EazzyBiz under its’s Eazzy Banking range of digital products for corporate and SME customers. The platform is aimed at giving users a comprehensive cash and liquidity management solution, by managing their cash flow and balances across different locations and currencies.

Barclays Bank

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With over 100 years of operation in Kenya, Barclays bank is the fifth-largest commercial bank in the country when you consider their asset base. The bank in the past mainly targeted corporate and retail clients but now has a wide variety of business accounts suitable for SME’s.

The SME business accounts are tailor made to offer private enterprise solutions that cater to your business needs. They include:

  1. Fadhili account – This account is tailor-made for NGO’s who will benefit from the bank’s extensive branch network and relationship support team.
  2. Advocates account – A business banking account that is designed to cater for the needs of businesses in the legal sector. The account has features suited to handle the dynamic nature of cash flow in the legal industry.
  3. Foreign currency account – This account offers you the best value for your foreign currency by giving you access to attractive deposit rates and treasury products.

In addition, the bank has a wide range of business banking accounts with attractive rates and features for medium and large enterprises. You can  join the Barclays business club where you can participate in training events and seminars, where you can sharpen your business skills and identify new partners, or establish effective supply chain networks.

Commercial Bank of Africa

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CBA is the largest privately owned commercial bank in Kenya. The recipient of the Best SME bank in Kenya during the 2016 Banks of Africa awards ceremony, the bank has a variety of lending options and business accounts for local businesses.

Lending solutions

The bank has developed tailor-made funding solutions to enable your business to benefit from improved working capital and liquidity management across its value chain. These include: invoice discounting, reverse factoring and local purchase contracts. In addition, CBA has a number of stock loan options for car, hardware or elecrical traders to buy business inventory.

The minimum amount you can borrow is Ksh. 300,000 and, depending on your circumstances you can borrow up to Ksh. 1 million.

Business accounts

The CBA seed business account is designed for entrepreneurs who have identified an opportunity, and are looking to start a business. The account is suitable for savings due to its competitive interest rates paid directly to your savings account.It allows you to file your tax returns via CBA’s online banking platform. You can borrow up to 150% of the balance in your savings account, therefore making it a viable option for extra funds whenever the need arises.

Standard Chartered Bank

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Established in 1911, Standard Chartered is among the top tier 2 banks with a total of 33 branches spread across Kenya, hundreds of employees and numerous ATM’s. The publicly listed company has a diversified portfolio cutting across select industries such as finance, manufacturing, agriculture, energy just to name a few. The bank which first introduced business banking solutions for corporate clients in Kenya is utilizing its vast experience in the local financial space in designing innovative products for businesses. Below are some of the more innovative options.

Business accounts

Your enterprise can benefit from business current accounts which offer an array of payments and collections services. These functions are integrated into the bank’s online platform thus making them convenient for cash management. In addition, the bank has an investment mortgage wing, which offers businesses the opportunity to invest in real estate, with the property acquired acting as a collateral for the loan.

Additional services 

To cater for the transaction and reporting needs of the business, the bank has developed a platform called Straight 2 bank. The integrated online banking service enhances cash management and offers greater control and security of your financial information.

Co-operative Bank of Kenya

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Co-operative Bank is recognized as the top Kenyan bank with a large number of Corporate and SME clients seeking to finance their “green energy projects”. Rooted in the co-operative movement, the bank aims to be a dominant player in Kenya’s financial services sector, through increased banking access and differentiated products to customers.

BizWise Current Account

You can sign up for the Bizwise current account and enjoy its many benefits.  The account has no maintenance fees or operating balance required. There are no charges on standing orders and local cheque deposits. Account holders can also enjoy overdraft facilities as a stop-gap measure to bridge short-term cash flow problems in their businesses. The balance can be paid at any time without penalties and interest is only calculated on the amount utilized.

Other features for Bizwise account holders can take advantage of include:

  • Construction Loan: The loan is a mainly self-securing facility available to Co-op and non-coop clients. There are no hidden fees involved and it requires very little documentation. Hence, the application and disbursement process is very quick.
  • Asset Finance: You can qualify for financing on new and second-hand assets, and enjoy attractive rates in both local and foreign currency. The repayment period is up to 60 months. There is insurance premium financing for assets purchased with the option of periodical renewals.

Diamond Trust Bank

 

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DTB is one of the leading regional banks in East Africa committed to the growth of SME’s and providing excellent customer service. The Nairobi-based bank, as an affiliate of the Agakhan Development Network (AKDN) seeks to foster financial inclusion by offering retail clients, small and medium-sized businesses and corporations with a complete range of banking products. These are investment advice, asset management and specialized financial and risk management services. Here are some of the products the bank has provides to businesses.

SME Toolkit

DTB runs a platform known as the SME toolkit in partnership with the International Finance Corporation’s SME solutions center. This product entails free information on business management and training for entrepreneurs on various business processes such as accounting, finance, and operations.

Once you sign up for the SME Toolkit platform you can access free tools, templates and videos to help in developing your business. The platform is also good for networking as you join a global small business directory from where you can link up with potential business partners.

Extra Features

The bank also offers tailor-made business loans to counter cash-flow difficulties or finance expansion plans. The loan applications take not more than 48 hours to be processed and you can negotiate for a suitable repayment plan. You can provide collateral in the form of property or cash margins. DTB also provides a variety of hybrid accounts and cards, such as the Huduma card, to help manage both your personal and business finances.

I&M Bank

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The privately owned bank is headquartered in Nairobi with a strong regional presence in East Africa. The bank was initially a  provider of personalized financial services for the Nairobi business community but has grown its portfolio over the years to include investment banking, online banking, and bancassurance. The bank has a number of products specifically suited for small and medium enterprises.

Online business club

The I&M online business club is a mobile app that enables you to sell your products and receive money directly to your I&M account via mobile money platforms. Members can display their product catalogs for free and contact potential buyers, through the platform. You can qualify for free membership to the club if you have a business transactional account with the bank.

Business transactional accounts

You can sign up for a Biashara business account, which is designed for businesses, that experience large volumes of transactions on daily basis. Account holders can earn IMBA reward points as well as enjoy internet banking services and daily emailed transaction. All businesses transactional accounts can be accessed through the I-click Internet platform, therefore making it convenient, and processing business transactions in real-time.

Cash Management service

I&M bank offers secure cash transportation by partnering with leading security firms to provide cash in transit services. The affordable service is available in all major towns and cities in the country and includes, collecting cash from customer’s premises and other relevant points for transportation to the bank, as well as making cash deliveries to business clients.

Kenyan banks are increasingly using online platforms and fintech solutions to streamline services and reach customers. You can now benefit from microloans offered by mobile banking apps, without having to visit a bank branch or contacting a credit officer. To learn more about personal finance, business finance, credit cards and insurance products, visit our platform where we look out for your wallet.

About the author

Wellington Ayugi

Wellington Ayugi handles Business Development at Covered and has a passion for personal finance, microfinance, and developments in financial technology