Tuesday, April 16, 2024

Co-op Bank to lend additional Sh. 12.6 billion to small businesses

The Co-operative Bank has raised Sh. 12.6 billion for lending to small businesses in the country. Co-op Bank has raised the funds from global institutional investors who include German fund, DEG, and Norwegian fund, Norfund.

Norfund has provided a direct credit line of Sh. 2 billion and another Sh. 430 million through the European Financing Partners.

Additional funds from the foreign investors have been channeled through the European Financing Partners –a joint venture between the European Investment Bank (EIB) and several European funds.

“The funds will strengthen the bank’s capital base, support lending to MSME and position the bank for future growth. Co-op is the third largest bank in Kenya, 65 per cent owned by local co-operatives and the largest co-operative bank in Africa,” said Norfund in a statement.

The latest funds for onward lending are part of the bank’s efforts that have been aimed at providing additional credit to shore up small businesses in the country.

Over the past few years, Co-op Bank has been entering into strategic financing investments aimed at boosting local small and medium enterprises.

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In November 2021, for instance, received Sh. 6.3 billion from the European Investment Bank for onward lending to small and medium businesses. These fund aimed at helping small and medium enterprises recover from the pandemic faster.

In February 2021 also, the bank had secured Sh. 1.6 billion funding from Swedish State-owned investor Swedfund for onward lending to small and medium- sized enterprises in the country.

And in January 2021, Co-op Bank had secured Sh. 8.3 billion funding from the International Finance Corporation, private sector arm of the World Bank, for onward lending to micro, small and medium-sized firms.

“This funding comes at a most opportune time as it boosts our ability to better support our MSME customers to stabilize and turn-around their businesses to meet their day to day challenges,” said Co-op Bank CEO Gideon Muriuki.

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