NewsOctober 10, 2024

$16 Million to grow Kenyan MSMEs: Abler Nordic & Norfund co-invest in Premier Credit

Abler Nordic and Norfund have each provided an $8 million USD senior loan in local currency to Premier Credit, a Kenyan microfinance institution focused on lending to micro, small, and medium enterprises (MSMEs) often overlooked by traditional banks.

This combined investment of $16 million USD in Premier Credit Kenya aims to boost access to affordable finance for unbanked entrepreneurs, aligning closely with Norfund and Abler Nordic's shared goals of empowering low-income households and creating jobs.

“Supporting MSMEs with accessible, flexible working capital is even more critical than ever to safeguard livelihoods and drive job growth, amid the rising cost of living and post-COVID economic challenges," said Godfrey Kaindoh, Investment Director and Africa Lead at Abler Nordic.

"Premier Credit's commitment to helping businesses in Kenya succeed is commendable, and we look forward to creating even greater value together with their strong management team.”

MSMEs in Kenya play a vital role in driving economic growth and reducing poverty, and contribute close to 40% to the country's GDP. With over 7.4 million businesses employing nearly 15 million people, which accounts for over three-quarters of the workforce in Kenya, MSMEs are pivotal in creating jobs.[1]

Despite this, many MSMEs struggle to access working capital to sustain and grow their businesses due to stringent bank lending criteria and lack of credit history and collateral.

"Kenya is a key country for our investments, and partnering with Abler Nordic to support Premier Credit underscores our commitment to empowering entrepreneurs and boosting job creation in Kenya," said Judy Kinyanjui, Investment Director for Financial Inclusion, Norfund.

Since starting in 2013, Premier Credit has enabled over 600,000 MSME entrepreneurs, particularly in remote areas and informal settlements, to access affordable financing through its nationwide presence. Close to 45% of Premier Credit’s customers are women and over 60% of customers live in rural areas.

The company has shown impressive growth, maintaining profitability and a strong loan portfolio, with a 90% customer retention rate due to a relationship-based approach, fast turnaround times and flexible repayments.

“Premier Credit Kenya is honored to partner with Abler Nordic and Norfund, and this investment will strengthen our capacity to serve the diverse needs of micro and small businesses in Kenya,” said Gideon Nyaga, Managing Director of Premier Credit.

“The funds will be allocated responsibly, ensuring that they have a meaningful impact on the businesses and communities we serve. As Premier Credit Kenya continues to grow and expand its reach, it remains committed to providing financial solutions that empower entrepreneurs, stimulate economic growth, and enhance livelihoods across Kenya.”

In addition to MSME loans, Premier Credit offers salary loans for households, pension loans, school development loans to low-cost private schools, and asset financing for water tanks and biodigesters, which convert organic waste into biogas for cooking and lighting, and bio-slurry for use as fertilizer.

The funding from Abler Nordic and Norfund will help Premier Credit continue to expand its geographic reach, increase its MSME portfolio, and diversify into sectors like education and agricultural value chains, beyond the current focus on trade and transport.

Norfund and Abler Nordic will further assess how they can use Business Support and grants for technical assistance projects, to support the entrepreneurs and MSMEs beyond finance.

[1] Kenya National Bureau of Statistics 2024