Co-operative Bank of Kenya has secured Sh750 million from the African Guarantee Fund (AGF) for lending to small businesses going green.
The partnership will support the growth of SMEs and Micro, Small and Medium-Sized Enterprises (MSMEs) through the provision of guarantees for the bank’s loan facilities.
The bank will finance businesses in green energy and solar installation projects.
“Our partnership with Co-operative Bank today reflects our commitment to increase financing of businesses in the green sector,” said AGF Group Director of Business Development Franck Adjagba on Tuesday.
Businesses are turning to solar energy to cut reliance on power generators that have raised production costs.
However, the switch to solar photovoltaic grid-tied systems is expensive.
“The challenge bankers and other financiers have had with respect to solar energy is that of securities offered. Solar panels and inverters provide poor security as they are not easily resold,” said Co-operative bank’s Director of Corporate and Institutional Banking Jacquelyne Waithaka.
“We hope that as the prices of solar solutions become more affordable, and AGF continues to develop other products, we will be able to finance solar products that reach an even greater number of Kenyans,” she added.