Co-operative Bank of Kenya says it has set aside a Sh3.375 billion war chest for affordable loans to small businesses owned by Kenyan women.
This is after the tier-one lender inked a long-term loan deal with German fund DEG – Deutsche Investitions- und Entwicklungsgesellschaft mbH, a subsidiary of KfW Group, for $25 million (Sh3.37 billion).
“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,” said both the fund and bank in a joint statement.
The 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, the parties said, will help to close existing gaps in funding for MSMEs on the local credit market in Kenya.
“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,” said Monika Beck, member of the Management Board of DEG.
“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.”
