EIB and KCB Partner to Boost Kenyan SMEs, Empower Women and Youth with €230M Investment

EIB and KCB Partner to Boost Kenyan SMEs, Empower Women and Youth with €230M Investment

(IN BRIEF) The European Investment Bank (EIB Global) and KCB Bank Kenya have formed a €230 million (KShs. 32 billion) partnership to support small and medium enterprises (SMEs), with a focus on women and youth-led businesses in Kenya. The investment, part of the “Investing in Young Businesses in Africa” (IYBA) initiative, is split equally between EIB and KCB. The funding will help provide capital to SMEs, particularly in the agriculture sector, and enhance opportunities for women entrepreneurs and young business leaders. The Bill & Melinda Gates Foundation will offer technical assistance, ensuring greater access to finance for women. This collaboration also aims to promote gender equality and job creation through sustainable business practices.

(PRESS RELEASE) LUXEMBOURG, 18-Oct-2024 — /EuropaWire/ — In a significant move to boost small businesses, women entrepreneurs, and youth-led enterprises in Kenya, the European Investment Bank (EIB Global) and KCB Bank Kenya have announced a landmark partnership worth €230 million (KShs. 32 billion). This partnership, the largest EIB Global has ever made in Kenya, aims to provide crucial financing for local small and medium-sized enterprises (SMEs), with a focus on promoting inclusive growth and empowering disadvantaged groups.

The financial package consists of a €115 million credit line from EIB Global, which will be matched by KCB Bank’s own contribution of €115 million. Together, the funds will be allocated to key areas that support the “Investing in Young Businesses in Africa” (IYBA) initiative, a programme designed to foster sustainable business growth across the continent.

As part of the initiative, €30 million (KShs. 4.1 billion) will be specifically dedicated to women-owned or led microenterprises, providing much-needed capital to a segment of the population that often struggles to access traditional financing. An additional €100 million (KShs. 14 billion) will be directed towards working capital and investments for SMEs, particularly those owned or managed by women, aligning with the 2X Challenge criteria.

The remaining €100 million (KShs. 14 billion) will focus on driving youth employment and fostering the growth of businesses led by young entrepreneurs. This financing will also prioritize sectors that employ significant numbers of young people, such as agriculture, where one-third of the funds will be directed towards supporting the sector’s value chain.

The initiative is further supported by the Bill & Melinda Gates Foundation, which will provide technical assistance to ensure that more women can access finance by addressing barriers such as a lack of collateral or credit history. By leveraging digital technology and risk-sharing mechanisms, the project aims to reduce loan costs for women entrepreneurs.

EIB Vice President Thomas Östros highlighted the critical role of SMEs in Kenya’s economy, stating: “Micro, small, and medium-sized enterprises are the backbone of Kenya’s economy, but they are particularly vulnerable to financial crises. This partnership will help address the financing gaps faced by SMEs and empower women and youth, ultimately promoting gender equality and sustainable job creation.”

The collaboration between EIB Global and KCB is part of the broader Team Europe Initiative “Investing in Young Businesses in Africa,” which not only provides capital to startups and early-stage businesses but also offers technical support and capacity building. This holistic approach ensures that businesses are sustainable and capable of generating long-term employment.

Paul Russo, CEO of KCB Group, emphasized the importance of the partnership in strengthening Kenya’s SME sector: “We are committed to overcoming the challenges that hinder the growth of SMEs. Through this partnership, we will provide tailored financial solutions, mentorship, and capacity-building programmes to ensure that these businesses can thrive in today’s competitive market.”

The European Union Ambassador to Kenya, Henriette Geiger, echoed these sentiments, underscoring the EU’s dedication to supporting early-stage businesses. She highlighted that the EU’s Investing in Young Businesses in Africa initiative has already mobilized €400 million in Kenya alone to support projects aimed at fostering business growth and job creation.

In addition to favourable financial terms such as extended loan tenures, EIB Global will also offer technical assistance for capacity building to KCB and its beneficiaries. This added support will enhance the impact of the funding, ensuring that it creates long-term value for all stakeholders involved.

With this latest partnership, KCB Bank continues to champion initiatives aimed at empowering women entrepreneurs, including its Female-Led and Made Enterprises (FLME) programme, which commits KShs. 50 billion annually to support women in business. This collaboration with EIB Global is expected to further boost these efforts, providing a solid foundation for economic growth and development in Kenya.

Background information

About EIB Global

EIB Global is the EIB Group’s specialised arm devoted to increasing the impact of international partnerships and development finance, and a key partner in Global Gateway. We aim to support €100 billion of investment by the end of 2027, around one third of the overall target of this EU initiative. With Team Europe, EIB Global fosters strong, focused partnerships, alongside fellow development finance institutions and civil society. EIB Global brings the Group closer to local people, companies and institutions through our offices around the world.

About KCB Bank Kenya

KCB Bank Kenya Limited is the largest commercial bank in the country.  A subsidiary of KCB Group Plc, the Bank has the largest branch network, with over 260 branches, 367 ATMs and 16,000 agents offering banking services on a 24/7 basis in East Africa. This is complemented by mobile banking and internet banking services with a 24-hour contact center services for our customers to get in touch with the Bank. KCB Group Plc- which also has presence in Uganda, Tanzania, South Sudan, Burundi, Rwanda DRC Congo and Representative offices in Ethiopia and Brussels also boasts of a wide network of correspondent relationships totaling over 200 banks across the globe and our customers are assured of a seamless facilitation of their international trade requirements wherever they are.

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SOURCE: European Investment Bank