The Co-operative Bank has received Sh. 6.3 billion from the European Investment Bank for onward lending to small and medium businesses.
The mega fund is aimed at helping small and medium enterprises recover from the pandemic faster. According to Co-op Bank chief executive officer Dr. Gideon Muriuki, micro, small and medium-sized (MSME) firms with up to 250 workers can apply for the loan at the bank.
The long-term loan will be repayable in seven years and will assist micro, small and medium-sized fund the acquisition of tangible business assets, working capital, development of distribution networks innovation and business research.
Dr. Muriuki added that the lending is part of Co-op Bank’s effort to contribute to the recovery of Kenya’s businesses following the financial and business challenges that have been in place since the 2020 year. “Co-operative Bank commitment to the SME sector in Kenya will ensure that this facility will be available immediately,” he said.
Dr. Muriuki added that the credit facility will be available for up to a maximum of Sh. 1.5 million per customer for a maximum loan tenor of seven years.
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The European Investment Bank, the lending arm of the European Union, has been partnering with the lender in finance investments since 2003. Over the recent past, Co-op Bank has been entering into strategic financing investments aimed at boosting local small and medium enterprises.
In February 2021 for instance, the bank secured Sh. 1.6 billion funding from Swedish State-owned investor Swedfund for onward lending to small and medium- sized enterprises in the country. “It is increasingly important that banks and other financial institutions continue to support small and medium-sized enterprises, and hence the entire economies through continued lending. Co-op Bank’s on-lending to SMEs is welcomed particularly in light of the pandemic and its effects on SMEs and female entrepreneurs,” said Swedfund in a statement.