KENYA – Co-operative Bank has received KSh6.3 billion (US$56 million) from the European Investment Bank (EIB) for onward lending to small businesses to help them recover from the impact of the Covid-19 pandemic.
Co-operative Bank Chief Executive Officer Gideon Muriuki said micro, small and medium-sized (MSME) firms with up to 250 workers can apply for the loan.
The long-term loan will be repayable in seven years and will assist MSMEs to fund the acquisition of tangible business assets, working capital, development of distribution networks innovation and business research.
Mr. Muriuki said the lending is part of the bank’s effort to contribute to the recovery of Kenya’s businesses following the Covid-19 challenges.
“The credit facility will be available for up to a maximum of Sh1.5 billion (US$13.3 million) per customer for a maximum tenor of seven years,” he said.
“Co-operative Bank commitment to the SME sector in Kenya will ensure that this facility will be available immediately,” Mr. Muriuki added.
The European Investment Bank, the lending arm of the European Union, has partnered with the lender in finance investments since 2003.
Earlier in November 2021, Proparco also granted Equity Bank two guarantee facilities, ARIZ and EURIZ totaling €39 million (KSh5 billion) to help the Kenyan bank further support MSMEs.
“Co-operative Bank commitment to the SME sector in Kenya will ensure that this facility will be available immediately”
Proparco also granted a €550,000 technical assistance facility to support Equity Group Foundation’s health projects.
Proparco and Equity Bank have been partners for three years thanks to a US$22.8 million loan granted in 2019 and a US$100 million loan granted in October 2020, both intended to support the Bank’s commitment to Kenya’s MSMEs the actors in the real economy.
The first, a €19,5 million (2.5 billion KES) ARIZ guarantee will cover 50% of the number of eligible loans allocated by Equity Bank to Kenyan MSMEs.
The second, a €19,5 million (2.5 billion KES) EURIZ guarantee will cover up to 70% of loans granted to women entrepreneurs or to MSMEs in sectors with high social or societal impacts such as Agriculture, Fisheries, Education and Health. Launched in May 2019 with the support of the European Union (EU) and the European Development Fund, and the Organization of African, Caribbean, and Pacific States (OACPS), the EURIZ guarantee aims to facilitate access to credit for MSMEs, in particular in sectors with a high development impact, in order to help them play their essential role in economic growth and job creation.
The two guarantees, which amount to a total of €39 million (5 billion KES), are the largest ever granted by Proparco to a financial institution.
Proparco also allocated today a €550,000 (70 million KES) technical assistance grant to the Equity Group Foundation (EGF).
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