Amica Sacco eyes SMEs to meet 2022 targets

By Monica Muema

An improved business environment in the country could significantly enhance the economic contribution of smaller –scale enterprises or SMEs, as local startups continue to ink deals with flexible financial institutions.

Such opportunities are now opening up the much-needed doors for financiers such as Amica Savings and Credit Ltd, with the firm now keen to increase its lending volume to SMEs – a key economic contributor.

Speaking recently in an exclusive interview, Amica Sacco Chief executive Mr. James Mbui said that the SME market segment offers the prospect of hitting this year’s revenue targets set out by the company.

The company is aiming to hit in excess of Sh1.2 Billion in total annual revenue by the end of 2022 – as it seeks to surpass the Sh 978 Million it posted for the year ended December 2021.

“The SME market is an important segment of our business who play a critical role for the growth of not only our loan portfolio but also the country’s GDP and as such an important focus on the sector will be very critical if we are to achieve our set targets for the year,” commented Mr. Mbui in an interview.

Industry figures show that Micro and small enterprises (MSEs) make a substantial contribution to livelihoods and inclusive growth in Kenya – accounting for about 24 percent of the country’s gross domestic product (GDP), with over 90 percent of private sector enterprises and 93 per cent of the total labor force in the economy.

To meet its ambitious targets for the year, the Murang’a – based Savings and Credit Cooperative (Sacco) will enhance its growth plans from the increased deposits and loan repayments which has been consistent for the last few years.

It is also betting big on its digital makeover as well as new opportunities in the industry brought by the Coronavirus pandemic which upended businesses across the segment for most part of 2020 and 2021.

Amica Sacco will also aim to focus on its revolutionary innovations such as the mobile banking platform (AMICASH) to build on the successful reworking of its business strategies over the last few years.

Since the pandemic hit more than two years ago, small businesses were presented with unprecedented challenges including lockdowns, containment measures, with demand shifts in response to COVID-19 pushing many MSMEs to the brink.

Access to affordable funding became more limited to such businesses after the pandemic, and while Mbui admits that the firm extended loan term reliefs and moratoriums, the majority of SMEs were forced to trim their work force to remain afloat, while others were pushed out of business completely.

The devastating Covid-19 pandemic negatively impacted on small and micro businesses (MSMEs), with most having to layoff, halt work, reduce employee salaries or temporarily shut down while other businesses chose to shut down, with just a few having reopened at full capacity.