KENYA – KCB Bank Kenya has received an approval for US$150 million from the International Finance Corporation (IFC) to increase lending to small and medium enterprises and green lending.
According to a statement by the Kenyan lender, the facility will help develop green lending and create employment opportunities for women as it embeds environmental sustainability in its growth strategy, portfolio and operations.
“This financing is aligned with our green financing goals and will also enable us to expand our financing to SME and special market segments like women and youth-owned enterprises that are critical to the growth of the economy but are facing acute financing gap,” said KCB Group Chief Executive Officer & Managing Director Joshua Oigara.
“The IFC credit complements the Kenya government’s effort through the MSME guarantee scheme to avail funding to this important section of our economy”Joshua Oigara – CEO, KCB Group
The loan facility especially targets SMEs which have suffered severe cash flow after COVID-19 affected demand and the supply chain.
The lender had announced earlier that it had restructured loans more than US$ 101 million by end of June due to COVID-19.
The Central Bank of Kenya had earlier projected that at least 75 percent of small and medium enterprises could cease operations without necessary credit support by June this year as the government remains vigilant of a possible coronavirus second wave.
“We are happy to partner with IFC in this innovative financial instrument which will enable us to support the economy as the country begins recovery from the impact of COVID-19. It will enable us open a path for more credit to the Small and Medium-Sized entrepreneurs,” Oigara added.
In 2019, KCB Group joined 30 other lenders globally under the auspice of UNEP- FI to develop and launch Principles for Responsible Banking that are guiding tools for global banking industry players aspiring to run sustainable businesses.
Since 2015 KCB Bank has incorporated Social and Environmental Management System (SEMS) into the lending process making it the ideal partner for this facility in Kenya.
According to this agreement, KCB will mobilize commercial financing into the SME and climate finance sector in Kenya and impart knowledge, drive innovation and build capacity while on other hand, IFC will offer training in the areas of green finance.
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