Chief executive Joshua Oigara said the credit line would enable the bank to expand financing to SMEs and special market segments such as women and youth-owned enterprises.
Under the loan agreement, KCB will be required to lend the money to the SME and climate finance sectors in Kenya while the IFC will offer training in the areas of green finance.
KCB in 2015 included social and environmental management system in its lending process to promote the sustainability agenda.
KCB Kenya #ticker:KCB has received Sh16.3 billion ($150 million) funding from the International Finance Corporation (IFC) to finance climate change projects and increase micro, small and medium enterprises loan book.
Chief executive Joshua Oigara said the credit line would enable the bank to expand financing to SMEs and special market segments such as women and youth-owned enterprises.
“We are happy to partner with IFC in this innovative financial instrument, which will enable us to support the economy as the country begins recovery from the impact of Covid-19. It will enable us open a path for more credit to SME entrepreneurs, he said.
“The financing is in line with our sustainability agenda to support a climate-resilient economy and reinforces the bank’s commitment to the Principles of Responsible Banking.”
Under the loan agreement, KCB will be required to lend the money to the SME and climate finance sectors in Kenya while the IFC will offer training in the areas of green finance.
KCB in 2015 included social and environmental management system in its lending process to promote the sustainability agenda.
Mr Oigara said the latest credit line would complement the recently launched micro, small and medium enterprises (MSMEs) guarantee scheme that aims to de-risk small firms and increase their access to credit.
SMEs, women and youth generally face acute financing gaps, with many banks viewing them as high-risk borrowers.
SMEs and micro-entities had a non-performing loans ratio of 14.9 per cent — the highest among KCB portfolios — at the end of June.
IFC’s credit line to KCB comes on the back of a Sh5.43 billion ($50 million) loan to Equity Group as part of its global $8 billion Covid-19 facility that it announced in March.
The loans cement the international lender’s position as the largest financier of local banks.
KCB Kenya in 2013 obtained a Sh4.34 billion ($40 million) six-year loan from IFC.
This was followed up by another Sh8.1 billion ($75 million) loan in 2018, which is repayable in eight years.
International financiers in KCB Group books include the African Development Bank and the European Investment Bank.
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