The Co-operative Bank of Kenya has raised a total of $100 million (Sh12.6 billion) in long-term debt from global institutional investors led by the German fund DEG.
The subordinated loan was channelled through the European Financing Partners –a joint venture between the European Investment Bank (EIB) and several European funds— and will help Co-op Bank shore up its capital base.
This was disclosed by Norwegian fund Norfund, one of the institutions participating in the financing with a direct credit line of $16 million (Sh2 billion) and another $3.4 million (Sh430 million) through the European Financing Partners.
“The funds will strengthen the bank’s capital base, support lending to MSME and position the bank for future growth. Co-op is the third largest bank in Kenya, 65 per cent owned by local co-operatives and the largest co-operative bank in Africa,” said Norfund on its website.
Kenyan banks have in recent years taken substantial loans from global funds such as the IFC, European Investment Bank (EIB) and Agence Française de Développement (AFD), attracted by relatively more favourable terms of debts including lower interest rates and longer maturity.