Co-op Bank is changing the business landscape with innovative business loans for MSMEs

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Are you a business owner running a Micro, Small and Medium Enterprise (MSME)? You want to boost your business, but you lack funds?

Do not worry anymore. MSME business and Co-op Bank loans have you covered.

In partnership with international financial companies, Co-op Bank has conducted extensive research to understand micro, small and medium enterprises (MSMEs).

The bank has developed a solution to help these entrepreneurs meet their needs and align with existing and new opportunities.

MSME term loan: what is it?

An MSME term loan is the amount your business can obtain to increase its supply operations or expand its business.

The loans come with a repayment period of between 12 and 60 months, depending on the size of your business.

The bank offers both unsecured term loans and partially secured term loans.

According to Arthur Muchangi, Retail & Business Banking Director at Cooperative Bank,

“Our message to MSMEs is simple; we heard you. We have made available a substantial pool of 15.2 billion shillings for a loan package including an unsecured commercial loan, a first of its kind in Kenya.

Electronic credit through our MCo-op Cash app, where businesses can borrow up to 2 million shillings through their packaged mobile phone insurance cover, which is handpicked and specifically negotiated to suit various market segments. MSMEs, revised and pre-approved limits on overdrafts and loans.

The loans will be backed by commercial services that include letters of credit, guarantees, supply chain finance, among others.

What are the main features of the Co-op Bank MSME Current Account?

Co-op Bank MSME current account offers bespoke features ranging from mobile loans, secured and unsecured overdrafts, insurance solutions, payment solutions, supply chain finance, credit cards , checkbook, internet banking, debit cards,

Mobile banking, dedicated relationship manager and non-financial services like training and networking.

Co-op Bank’s MSME solutions meet the needs of entrepreneurs by providing three MSME account packages that meet the different requirements of their clients:

  • Gold: Offers a maximum of Ksh 10 million unsecured and Ksh 15 million for partially secured loans
  • Silver: A maximum loan of Ksh 6 million unsecured and Ksh 8 million for secured loans
  • Bronze: A maximum of Ksh 600,000 unsecured loans and Ksh 3 million secured loans

Unsecured loans have a repayment period of 24 months, while secured loans have a repayment period of up to 60 months.

In addition, all account holders benefit from the following Co-op Bank services:

  • Free monthly eStatements
  • Access to MSME asset solutions and daylight overdrafts
  • Free internal standing orders
  • Tradable FX Conversion Rates
  • SMS and email alerts
  • Access to trade finance services.

What are the interest rates charged on MSME loans from the Co-op Bank?

Co-op Bank charges loans to MSMEs in two different ways; a customer can opt for two.

Lump-sum loans to MSMEs

The loan attracts an interest rate of 13% per annum with an appraisal fee of 2.5%. The loan is for a maximum period of 36 months and does not incur any negotiation or administration fees.

Reduction in MSME loan balance

The loans attract an interest rate of 13% per annum with an application fee ranging between Ksh 3-15 million depending on the amount. The loan also attracts a 3% appraisal fee and comes with a maximum term of 36 months.

Who can qualify for MSME loans from the Co-op Bank?

Clients operating business accounts with Co-op Bank as individuals are eligible to apply for MSME loans if they meet the following criteria:

  • A customer must have an account linked to MCo-op Cash
  • A client should have no non-performing loans with the bank
  • A customer must not be blacklisted by the CRB or blacklisted by the bank
  • Must have an account with Co-op Bank for at least six months.
  • Must be between 18 and 65 years old
  • Must hold non-overdrawn accounts beyond the approved limit
  • Not be in arrears with the bank at the time of application
  • Should not have funds blocked in their accounts
  • Should not have any of their loans with the bank written off

How to Apply for an MSME Loan from the Co-op Bank

If you are not a member of the Co-op Bank, go to the local bank to open an account and start transacting to enjoy the benefits of MSME loans after six months.

For existing Co-op Bank members, use your MCo-opCash app or dial *667# and register to start the app if you qualify.

You can download the MCo-opCash app from the Google Play Store.


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