 UGANDA's Central Bank has cleared the Fina Bank Group, Kenya's second financial institution to open up shop in Kampala.
The Bank has also signed a 20 million Euros credit agreement with the European Investment Bank (EIB) to consolidate its expansion programme as a SME bank in East Africa over the next 10 years.
We wish to be known as the prime SME bank in East Africa and as such we
will use the same operating model as we have in Kenya, Mr. Frank
Griffiths, the group's chief executive, said in an interview.
The Bank is expected to kick off operations in Uganda by end of the first quarter of 2008, he added.
Some US$3 million dollars has been committed to the Ugandan market over the next few years.
We will start in Kampala and over time open other branches to connect
Kenya with Rwanda along the lines of communication, Mr. Griffiths
explained.
On Friday, Fina Bank signed the Euro 20 million line of credit
agreements with EIB to support the bank's expansion in the regional
small and medium sized enterprises (SME) market as it spreads its wings
into the region starting with Uganda.
This long term support will be available both in local and foreign currencies, will assist Fina Bank's
Fina Bank was one of the first banks to have a specific SME focus in
Kenya and Rwanda and is considered to be playing an important role in
developing this important segment of the country's economy.
EIB continues to support for SME development through credit to select
intermediaries in Africa, the Pacific and Caribbean region (ACP).
Targeted medium-sized investments include agro-industry, fishing,
mining, food processing, manufacturing and tourism sectors as well as
education and health care through banking institutions.
The loans will be available to draw in Shillings, US Dollars or Euros at either floating or fixed rates.
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The agreement with EIB is for a limited amount so priority will be
given to companies with expansion projects which can demonstrate a
positive impact on the economy," said Jared Aimba, the bank's head of
business banking.
Mr. Carmelo Cocuzza, head of the EIB's regional representation in
Nairobi, stated that the availability of business loans with a maturity
exceeding five years on the Kenyan market is limited.
The EIB's line of credit will help Fina Bank expand the offer of this
product. The borrowers will benefit from longer tenors to fund their
long term investments and from protection against interest rate
volatility through the fixed interest rate option," said Carmelo.
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