Standard Chartered Bank Kenya has unveiled a new investment-linked lending product that allows clients to borrow against their Kenya Government Bonds (KGBs) purchased through the Central Bank of Kenya’s Dhow CSD Portal.
The innovation, targeted at Priority Banking clients, is designed to provide flexible access to liquidity by unlocking the value of government bond holdings, in a move that could reshape how retail and institutional investors interact with public debt instruments.
“Standard Chartered Priority Banking is bringing new innovation to your investments. You can now borrow against your investments in Kenya Government Bonds purchased through the Dhow CSD,” the bank said in the notice sent to clients.
Under the new offering, clients can borrow against Kenya government bond at a competitive interest rate of 14% per annum, using their government bond investments as collateral. Borrowers may draw up to 50% of the value of their CSD Dhow portfolio, creating an opportunity to reinvest or meet pressing financial needs without liquidating long-term assets.
The Dhow CSD Portal, launched by the Central Bank of Kenya (CBK), is a digital platform that allows investors to buy and manage government securities online. Standard Chartered’s move leverages this platform, enabling clients who purchased bonds directly through CBK to borrow against them seamlessly.
This initiative marks a significant step in aligning traditional fixed-income investments with modern personal finance solutions. It also underscores how banks in Kenya are increasingly integrating digital platforms like the Dhow CSD into their retail product offerings.
“Borrow against your Kenya Government Bond that you invested directly with CBK either to reinvest or address any personal needs,” the bank noted.
Government bonds have traditionally been viewed as low-risk, long-term investments with limited liquidity. However, Standard Chartered’s new facility introduces a secondary liquidity option without requiring investors to sell their assets prematurely.
By allowing investors to borrow up to 50% of their bond portfolio value, Standard Chartered offers a level of flexibility not commonly associated with treasury instruments. The product can support a wide range of personal or business-related expenses, from asset purchases and medical needs to investment diversification.
Kenya’s financial markets have witnessed a shift toward digitalization, with platforms like the CBK’s Dhow CSD Portal accelerating retail participation in government securities. Banks, in response, are adjusting their value propositions to meet evolving client expectations.
Standard Chartered’s entry into bond-backed lending follows similar trends seen globally, where asset-backed loans are growing in popularity among wealth management clients.
Asset-based lending is a financing method in which a business or individual uses owned assets as collateral for a loan. The amount a lender is willing to offer depends significantly on the value of the asset provided, along with other qualifying factors.
The product is currently available to Standard Chartered Priority Banking clients typically high-net-worth individuals with extensive financial portfolios. Clients eligible for the facility must have invested in government bonds directly. These bonds are then evaluated by the bank before determining the loan amount, subject to a 50% loan-to-value ratio.
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