Sunday, May 26, 2024

Co-op Bank to lend Sh. 3.32 billion to women-owned SMEs across Kenya

Co-Op post

The Co-operative Bank is set to start funding small and medium enterprises that are owned by women. This is after the bank received Sh. 3.32 billion long term loan for onward lending to this category of small and medium enterprises from the German fund DEG.

“The financing from DEG comes at the right time since there is a great need for 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,” said Gideon Muriuki, the Group Managing Director and Chief Executive Officer of Co-op Bank.

The new loan that is aimed at women-owned SMEs comes an additional vote of confidence for Co-op Bank, which has been scaling up its efforts to fund small businesses in the country.

“The current investment is an important contribution to supporting SMEs in developing countries and those run by women,” said Monika Beck, a member of the management board of DEG.

“The EU guarantee is helping to realize this investment which is particularly relevant in view of its development impact, thereby creating jobs and raising household income locally.”

It is not the first time that Co-op Bank and DEG are partnering to fund small businesses.

In July 2023 for instance, the bank received a long-term 7-year funding facility amounting to USD 100 million (Sh. 13.1 Billion) from a consortium of financial institutions led by DEG for on-lending mainly to Micro, Small and Medium-sized Enterprises (MSMEs) in Kenya.

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That loan was a Tier II Facility, in which DEG acted as Lender, Mandated Lead Arranger and Facility Agent.

At the same time, the Consortium included The Africa Agriculture & Trade Investment Fund (AATIF), Micro Small Medium Enterprises Bonds (MSMEB) and European Development Finance Institutions namely Finnfund, Norfund and the co-financing facility European Financing Partners(EFP).

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