KCB Bank Kenya has secured a €230 million (Kshs 32 billion) for supporting small and medium enterprises (SMEs), youth and women in Kenya. Of this amount, €115 million will be a credit line from European Investment Bank (EIB Global) to KCB, matched by €115 million from KCB’s own funds.
Through the ‘Investing in Young Businesses in Africa’ (IYBA) initiative, €30 million (Kshs 4.1 billion) will go to women-led/owned micro-enterprises. The package will also see €100 million (Kshs 14 billion) dedicated to working capital and new investments in small and medium enterprises, specifically targeting businesses owned or run by women, in line with the 2X Challenge criteria.
The balance of €100 million (Kshs 14 billion) will target inclusive growth and youth employment opportunities, with a focus on businesses led/founded by young entrepreneurs or employing at least 40% young people.
One-third of the financing to KCB shall be allocated to beneficiaries in the agriculture sector value chain.
Investments, Trade, and Industry, Cabinet Secretary, Salim Mvurya says the initiative will provide critical funding and resources, particularly focusing on supporting young entrepreneurs and women.
Mvurya underscored the pivotal role played by MSMEs in Kenya’s economy by contributing 33% to the country’s GDP. “This credit line is a vital lifeline for early-stage businesses, empowering our youth and women to embark on self- sustaining ventures,” he said.
KCB Group CEO, Paul Russo says: “We are scaling our interventions to build a strong and vibrant SME sector to provide a strong foundation in our efforts to lift communities. We are increasingly addressing the barriers that hinder their growth and use this funding to provide tailored financial solutions, business mentorship, and capacity-building initiatives to ensure that SMEs are not only surviving but thriving in the dynamic marketplace.”
The Gates Foundation will provide technical assistance for the project and address a range of issues that limit women with low incomes from accessing finance – such as lack of collateral or credit history. This support will help to lower the cost of loans to women through digital technology and risk sharing.
European Investment Bank Vice President, Thomas Ostros said: “Micro, small and medium-sized businesses are the economic lifeblood of Kenya but are more vulnerable to crises than larger enterprises. The lack of adequate, affordable financing puts significant pressure on private lending, which in turn has entrepreneurs and small companies at a disadvantage. We believe that this new partnership will help spur private sector growth, gender equality, youth empowerment, promotion of sustainable job opportunities, and reduction of poverty.”
The financing support to KCB is part of the IYBA initiative, which is supported by various EU Member States and their financial institutions that look to not only provide capital for start-ups and early-stage businesses; but also provide technical assistance and capacity-building to ensure businesses are bankable and sustainable for the long term, thus spurring job creation.
The IYBA event brought together players from Kenya’s private sector, government, and European financial institutions and donors to address the current challenges and opportunities available to support youth and women-led enterprises, early-stage businesses, and start-ups in Kenya to grow sustainably and create jobs.
The European Union Ambassador to Kenya, Henriette Geiger said: “For the European Union, investing in businesses is key. EU’s Investing in Young Businesses in Africa (IYBA) is a € 4 billion Global Gateway Team Europe Initiative (TEI) that since 2021 it has supported thousands of micro, small, and medium-sized businesses across Sub-Saharan Africa. In Kenya only, the TEIIYBA has identified € 400 million in projects and initiatives supporting early-stage enterprises.”