Co-op Bank lines up billions for women-owned SMEs after German loan deal
Business
By
Brian Ngugi
| May 02, 2024
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 ="https://www.standardmedia.co.ke/health/opinion/article/2001454953/women-smes-support-a-pathway-to-equality-in-the-financial-sector">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.
READ MORE
State priorities in sharp focus as Executive splurges on luxuries
Firm charts green energy path with low-carbon emission engines
New Eco Levy threatens Kenya's green future and jobs, say experts
Kenya must make tough choices now to turn around the economy
Ruto's haste to introduce more taxes will turn out to be a wild goose chase
Adak says Kenya will have a very clean team at Olympics in Paris
Tax proposals will claw back gains in climate change fight
Traders warn high levies will be a burden to hustlers
Hinga: Finance Bill proposals on affordable housing will make selling of units hard
Insurers oppose proposed motor circulation tax in Finance Bill, 2024
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. ="https://www.standardmedia.co.ke/business/financial-standard/article/2001486209/msmes-poised-to-drive-banks-sustainability-agenda">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.”
="https://www.standardmedia.co.ke/business/business/article/2001473176/co-op-bank-lines-up-sme-loan-billions-as-net-profit-hits-sh61b">Dr Gideon Muriuki<, Group Managing Director and CEO of Co-operative Bank Group, welcomed the funding.
“The financing from DEG has come at the right time, as it gives us the opportunity to offer funding that is correctly structured and priced to respond to the unique needs of businesses owned by women,” he said.
The parties said the current transaction contributes to the UN Sustainable Development Goals (SDGs), notably SDG 8 ‘Decent work and economic growth’ and SDG 5 ‘Reduced inequalities’ as well as to the EU’s Global Gateway Initiative.