Sh12.9b facility pact to boost SME lending

KCB Bank Kenya has signed a $100 million (Sh12.9 billion) financing facility with the European Bank for Reconstruction and Development (EBRD) to expand credit access for micro, small and medium-sized enterprises, the lender said on Tuesday.

The facility marks the EBRD's first investment in Kenya's financial sector since the development bank began operations in the country last year.

Under the agreement, 35 per cent of the facility will be directed toward women and youth-led enterprises, while 30 per cent will finance eligible green investments, enabling businesses to adopt climate-smart technologies and sustainable practices.

For Kenya's small businesses, the deal addresses a persistent financing gap.

MSMEs account for the bulk of private sector employment but have long faced barriers accessing formal credit due to limited collateral and high perceived risk.

The facility effectively lowers the cost of lending for KCB, allowing the bank to pass on more affordable financing to smaller borrowers.

The EBRD, owned by 73 countries and the European Union, was established in 1991 to help former Soviet bloc countries transition to market economies.

It expanded its mandate to sub-Saharan Africa in recent years, with Kenya becoming a recipient of its investments in 2025.

The bank focuses on private sector development, financial inclusion, sustainable infrastructure and the green transition.

EBRD's Managing Director for Sub-Saharan Africa, Heike Harmgart, said the partnership aims to unlock the potential of Kenya's private sector.

"This investment marks our first investment in Kenya's financial sector," Harmgart said. "By partnering with KCB Bank, we are helping to channel much-needed financing to MSMEs, the engines of job creation and economic growth.”

Beyond the financing, the EBRD will provide technical assistance to KCB to strengthen its green lending capabilities through specialised training, advisory services and technical expertise.

KCB Bank Kenya Managing Director Annastacia Kimtai said the facility would strengthen the bank's capacity to extend affordable financing to SMEs, particularly those that have traditionally faced barriers in accessing credit.

"We remain committed to sustainable finance by increasing investments in renewable energy, climate-smart agriculture and other green projects that contribute to Kenya's climate ambitions while creating long-term economic value," Kimtai said.

The deal builds on KCB's existing SME lending. In the first quarter of 2026, the bank extended Sh13 billion in new credit to micro, small and medium enterprises