Co-operative Bank of Kenya has received a $25 million (Sh3.32 billion) long-term loan from the German fund DEG for on-lending to women-led micro, small and medium-sized (MSMEs) enterprises in Kenya.
DEG, a subsidiary of KfW Group, announced Thursday the credit line will help to close existing gaps in funding for MSMEs in Kenya.
“The financing from DEG comes at the right time since there is a great need for stronger backing of businesses that are owned or managed by women. Furthermore, the facility will boost the bank’s capacity to cover the long-term funding requirements of SMEs,” Gideon Muriuki, the managing director of Co-op Bank, said in a statement.
This marks the latest long-term facility for Co-op Bank that involves DEG. The German fund last year acted as the lender, lead arranger and facility agent when Co-op Bank tapped a $100 million (Sh13.3 billion) tier II capital facility from a consortium of financial institutions.
European Fund for Sustainable Development Plus (EFSD+), which was established as part of the EU's Global Gateway Initiative to boost cooperation with the private sector, was used to guarantee part of the $25 million loan provided by DEG.
“The current investment is an important contribution to supporting SMEs in developing countries and those run by women,” said Monika Beck, a member of the management board of DEG.
“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.”
Co-op Bank’s loan book grew to Sh373.7 billion last year from Sh339 billion in 2022, with Sh25.22 billion going to micro-enterprises and SMEs.
