- DEG has provided the Co-operative Bank of Kenya with a $25 million loan to support SMEs owned by women
- The facility will help to close existing gaps in funding for MSMEs on the local credit market in Kenya
- This financing is the first to be made by DEG in which a guarantee from the European Fund for Sustainable Development Plus is used to secure part of the loan
Germany – DEG, a subsidiary of KfW Group, is providing its long-standing customer, the Co-operative Bank of Kenya (Co-op Bank), with a long-term loan of $25 million.
The Co-op Bank will use the funds to set up a credit line intended exclusively for micro, small and medium-sized enterprises (MSMEs) that are managed or owned by women.
Credit line for women-led businesses
This 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.
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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.
The credit line will help to close existing gaps in funding for MSMEs on the local credit market in Kenya.
According to Monika Beck, a member of DEG’s Management Board, the Co-op Bank has been a long-standing customer of DEG, and the investment issued will support SMEs.
“The current investment is an important contribution to supporting SMEs in developing countries in general and SMEs run by women especially. 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,” said DEG’s Beck.
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Co-op Bank Group’s CEO, Dr Gideon Muriuki, also lauded the financing, saying it came at the right time.
“There is a great need for a 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,” he added.
DEG has partnered with Co-op Bank since 2013, and the current transaction contributes to the UN Sustainable Development Goals (SDGs), notably SDG 8 and SDG 5, as well as to the EU’s Global Gateway Initiative.
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