Faulu Microfinance Bank announced that it is redirecting its loan portfolio to concentrate on traders and small enterprises after a two-year transition period.
The shift moves the bank away from its historic emphasis on retail customers and loans primarily secured by payslips.
New products now include asset financing, working-capital loans and trade-finance facilities aimed at businesses that lack traditional collateral such as land or vehicles.
Gloria Kositany, senior manager of marketing and communications at Faulu, said that many traders receive payments via paybills, till numbers and cash, which makes it hard for them to pool income when applying for credit.
To tackle this issue, the bank has launched a merchant platform that lets businesses combine their revenue streams and manage transactions through a single online portal.
Information on cash flow gathered from the platform is used to evaluate repayment capacity instead of relying mainly on physical assets as security.
Faulu is also providing trade-finance solutions for firms that need to import or purchase goods but do not have the upfront capital, with financing secured against the goods themselves.
Kositany added that lenders must understand the operating cycles of different businesses and tailor loans to cash-flow patterns, citing schools that collect fees mainly during term time as an example of entities that could struggle with monthly repayment schedules.
Property owners are offered targeted credit top-ups linked to rental income to fund repairs.
Beyond credit, the bank says it is boosting customer interaction through financial advice, on-site business visits and regular communication to spot challenges early and restructure loans where needed.
An upgrade to Faulu’s internal digital systems now gives frontline staff a unified view of customers’ transaction histories and insurance products, intended to speed up service delivery.
The institution operates 24 branches and around 150 agents nationwide.
Faulu reported a 39.7 per cent share of Kenya’s microfinance banking market in the previous year.
