Co-operative Bank of Kenya, one of the leading financial institutions in the country, has successfully obtained a $100 million (Sh14.14 billion) long-term loan. The loan was granted by a consortium of financial institutions, with DEG at the helm, and is intended to support the bank’s initiatives in providing financial assistance to micro, small, and medium-sized enterprises (MSMEs) in Kenya.
On Friday, the lender announced that it had secured a seven-year tier II facility. DEG, a development finance institution based in Germany and a subsidiary of KfW Group, played multiple roles in this arrangement, acting as the lender, mandated lead arranger, and facility agent.
The funds from this loan will be utilized by Co-operative Bank of Kenya to further expand its lending activities targeted specifically at MSMEs. These enterprises play a vital role in Kenya’s economy, driving innovation, generating employment, and contributing to poverty reduction.
However, MSMEs often face challenges accessing affordable financing, hindering their growth and potential. The loan will provide much-needed capital to these enterprises, enabling them to expand their operations, invest in new technologies, and create additional job opportunities.
“The funding by DEG and the consortium is most timely in view of the great need to better support our business customers,” said Gideon Muriuki, managing director at Co-operative Bank Group.
Co-operative Bank of Kenya has a long-standing reputation for its focus on inclusive banking and support for local businesses. By leveraging this loan facility, the bank aims to enhance its efforts in offering tailored financial solutions to MSMEs, including credit facilities, business advisory services, and capacity-building programs.
These initiatives will not only empower MSMEs but also foster economic resilience and sustainable development in Kenya. The partnership with DEG and the consortium of financial institutions demonstrates the collaborative approach taken by Co-operative Bank of Kenya to address the financing needs of MSMEs.
The consortium comprised a range of additional financiers, including the Africa Agriculture & Trade Investment Fund, Micro Small Medium Enterprises Bonds, and prominent European development finance institutions such as Finnfund, Norfund, and the co-financing facility European Financing Partners.
This collective effort highlights the importance of public-private partnerships in promoting economic growth and ensuring financial inclusion at a grassroots level.
“By acting as lead arranger and providing the subordinated loan to Co-op Bank, DEG contributes to the further development of Kenya’s financial sector and the wider economy through the creation of jobs and local income,” said Monika Beck, a board member at DEG.
With the infusion of this significant loan facility, Co-operative Bank of Kenya is well-positioned to continue its mission of empowering MSMEs and contributing to the economic prosperity of Kenya. The bank remains committed to supporting the growth and sustainability of MSMEs, ultimately driving forward Kenya’s journey towards a more inclusive and resilient economy.
Do you have any story or press releases you want to share? Send tips to email@example.com