Kenya: EIB Global and KCB Bank sign €230M (KShs.32B) deal to support SMEs, youth and women

• EIB Global provides a €115 million credit line, which KCB will match
• This is EIB Global’s largest ever financing support to businesses in Kenya to date
• Financing is part of Team Europe’s “Investing in Young Businesses in Africa” – IYBA initiative

The European Investment Bank (EIB Global) and KCB Bank Kenya have today announced a €230 million (KShs. 32 billion) partnership to support small and medium enterprises (SMEs), youth and women in Kenya. €115 million will be a credit line from EIB Global to KCB, matched by €115 million from KCB’s own funds.

Through the ‘Investing in Young Businesses in Africa’ (IYBA) initiative, a total of €30 million (KShs. 4.1 billion) will go to women-led/owned microenterprises. The package will also see €100 million (KShs.14 billion) dedicated towards working capital and new investments of small and medium enterprises specifically targeting businesses owned or run by women, in line with the 2X Challenge criteria.

The balance of €100 million (KSh14 billion) will target inclusive growth and youth employment opportunities with a focus on businesses led/founded by a young entrepreneur or employing at least 40% young people. One-third of the financing to KCB shall be allocated to beneficiaries in the agriculture sector value chain.

The Gates Foundation will provide technical assistance for the project and address a range of issues that limit women with low incomes from accessing finance - such as lack of collateral or credit history. This support will help to lower the cost of loans to women through digital technology and risk sharing.

European Investment Bank Vice President, Thomas Ostros said, “Micro, small and medium-sized businesses are the economic lifeblood of Kenya but are more vulnerable to crises than larger enterprises. The lack of adequate, affordable financing puts significant pressure on private lending, which in turn has entrepreneurs and small companies at a disadvantage. We believe that this new partnership will help spur private sector growth, gender equality, youth empowerment, promotion of sustainable job opportunities, and reduction of poverty,” he added.

The financing support to KCB is part of the IYBA initiative, which is supported by various EU Member States and their financial institutions that look to not only provide capital for startups and early-stage businesses; but also provide technical assistance and capacity building to ensure businesses are bankable and sustainable for the long term, thus spurring job creation.

KCB Group CEO, Paul Russo said, “We are scaling our interventions to build a strong and vibrant SME sector to provide a strong foundation in our efforts to lift communities. We are increasingly addressing the barriers that hinder their growth and use this funding to provide tailored financial solutions, business mentorship, and capacity-building initiatives to ensure that SMEs are not only surviving but thriving in the dynamic marketplace.”

The IYBA event brought together players from Kenya’s private sector, government, and European financial institutions and donors to address the current challenges and opportunities available to support youth and women-led enterprises, early-stage businesses, and start-ups in Kenya to grow sustainably and create jobs.

The European Union Ambassador to Kenya, H.E Henriette Geiger said, “For the European Union, investing in businesses is key. EU’s Investing in Young Businesses in Africa (IYBA) is a € 4 billion Global Gateway Team Europe Initiative (TEI) that since 2021 it has supported thousands of micro, small and medium-sized businesses across Sub-Saharan Africa. In Kenya only, the TEI IYBA has identified € 400 million in projects and initiatives supporting early-stage enterprises”.

The EU Ambassador added: “This new deal between EIB and KCB is another milestone in EU’s support to job creation through the early-stage businesses and SMEs, giving Kenyan entrepreneurs a needed push to grow their businesses and achieve their objectives.”

Financial intermediaries such as local banks benefit from EIB Global’s favourable financial terms, including for example longer tenures. Aside from credit lines, EIB Global provides technical assistance for capacity building to both the financial intermediary, and to the final beneficiaries. This provides substantial added value to all involved partners for initiating sustainable projects.

KCB Bank Kenya runs a women focused proposition dubbed Female-Led and Made Enterprises- FLME, where the Bank has set aside KShs.50 billion annually to support women entrepreneurship. This is part of the larger support ecosystem for youth and SMEs.

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.