The Co-operative Bank of Kenya has secured USD 25 million (Kshs 3.3 billion) in longterm financing from DEG – Deutsche Investitions- und Entwicklungsgesellschaft mbH, a subsidiary of KfW Group, for on-lending to women-owned SMEs based in Kenya.
Co-op Bank will use these funds to set up a credit line intended exclusively for micro, small and medium-sized enterprises (MSMEs) that are managed or owned by women.
Co-operative Bank Group Managing Director, Gideon Muriuki, said: “The financing from DEG comes at exactly the right time, since there is a great need for stronger backing of businesses that are owned or managed by women. Furthermore, the facility will boost the Bank’s capacity to cover the long-term funding requirements of SMEs.
This financing is the first to be made by DEG in which a guarantee from the European Fund for Sustainable Development Plus (EFSD+) is used to secure part of the loan.
EFSD+ was established as part of the EU’s Global Gateway Initiative to boost cooperation with the private sector and to enable projects particularly relevant in terms of development policy. The credit line will help to close existing gaps in funding for MSMEs on the local credit market in Kenya.
Monika Beck, member of the Management Board of DEG, said: “The Co-op Bank is a long-standing customer of DEG. The current investment is an important contribution to supporting SMEs in developing countries in general and SMEs run by women especially.
“100 per cent of the funds provided will go to female entrepreneurs. The EU guarantee is helping to realise this investment which is particularly relevant in view of its development impact, thereby creating jobs and raising household income locally.”
The Co-op Bank was founded in 1965 by local co-operative societies and unions as a specialist bank for the co-operative movement in Kenya. The Bank has been a fully-fledged commercial bank since 1994. DEG has partnered with Co-op Bank since 2013.
The current transaction contributes to the UN Sustainable Development Goals (SDGs), notably SDG 8 ‘Decent work and economic growth’ and SDG 5 ‘Reduced inequalities’ as well as to the EU’s Global Gateway Initiative.