KCB Group, the country’s largest and most profitable lender, has secured a US$ 150 Million credit facility to enable it to increase lending to climate-friendly projects and small business enterprises, especially those run by women.
Of the US$150 million, International Finance Corporation (IFC) contributed US$ 101.75 Million. It mobilized US$22 Million from the Belgian Investment Company for Developing Countries (BIO), US$15 Million from SANAD Fund for MSMEs and US $11.25 Million from Symbiotics.
KCB War Chest
This facility will strengthen the bank’s capital base and allow it to finance eligible projects and businesses, many of which face COVID-19-related challenges, including challenges accessing working capital and funds for expansion.
KCB is seeking to increase its MSME portfolio and build on its existing support for clean energy, green buildings and climate-smart agribusinesses projects, helping Kenya meet its climate targets.
IFC and the co-lenders will also provide advisory services to help KCB Bank Kenya expand lending for green projects and better monitor and support its portfolio.
According to the KCB Group Chief Executive Officer & Managing Director, Joshua Oigara, the SME sector is a bank growth area and this loan will help expand financing to unique market segments like women and youth-owned enterprises that are critical to the economy’s growth.
Dr Daniela Beckmann, SANAD Board Chairperson, said, “We are happy to partner with other lenders to support KCB Bank Kenya increase its outreach to MSMEs, including women-owned businesses across the country in line with SANAD’s mission to support entrepreneurship and job creation.”
Luuk Zonneveld, CEO at BIO, said, “We are very happy with this investment in KCB Bank Kenya, as this investment will allow the institution to continue to provide and expand its services to local SMEs in Kenya, strengthening the local economy in one of our target countries.”
Duncan Frayne, Regional Director for Africa at Symbiotics, said, “Symbiotics sees significant opportunities in green financing and is proud to help KCB Bank Kenya in these initiatives whilst also funding the growth of its SME loan portfolio.
Our support also has the potential to promote greater banking sector resilience that will contribute to financial market stability and help the market withstand shocks by boosting capital adequacy.”
Jumoke Jagun-Dokunmu, IFC Regional Director for Eastern Africa, said, “This support from IFC and our partners will help KCB Bank Kenya expand its portfolio of climate-friendly projects and reach smaller businesses at a time when many are facing COVID-19-related challenges.
Supporting green projects and smaller businesses will help Kenya recover faster from the current economic slowdown.
IFC’s committed investment portfolio in Kenya stood at US$887.3 Million as of June 30, 2020. IFC’s portfolio in the country is predominantly in the financial, manufacturing, agribusiness, services and infrastructure sectors.