This increases Swedfund’s total commitment to US$14.45 million.
“Small and medium-sized companies need access to long-term financing with the purpose to create jobs. We are happy to announce this additional investment that enables us to reach more SMEs getting access to finance in some of the least developed countries in the world,” said Swedfund’s CEO Maria Håkansson.
Development Finance Institutions like Swedfund, have a key role in helping to increase the number of sustainable businesses in developing countries as well as supporting their growth and resilience particularly after the Covid-19 pandemic.
In Sub Saharan Africa, nine out of ten jobs are generated in the private sector, with an estimated 80 per cent of these in small and medium-sized companies.
Since Swedfund’s first investment in August 2020, the fund manager has invested in approximately 20 companies enabling entrepreneurs to access the financing and support they need to strengthen and develop their businesses in regions often neglected by investors.
This additional investment also provides Swedfund with the opportunity to support further improvement of Environmental, Social and Governance processes, especially with respect to labour rights, gender and human rights in the fund’s portfolio companies.
In 2021, The Co-operative Bank of Kenya (Co-op Bank), which is the fourth-largest bank in Kenya by assets, secured a long-term syndicated loan of US$15 million from the Swedish development bank -Swedfund.
The funding was for onward lending to small and medium- sized enterprises (SMEs) in the country.
While announcing the long-term funding, whose interest rate was not disclosed, Swedfund said that the facility would uplift Co-op Bank’s lending to the small enterprises who have been most affected by economic disruption from the Covid-19 pandemic.