ACP GENDER MICROFINANCE FACILITY - KCB KENYA

Promoteur – Intermédiaire Financier

KCB BANK KENYA LTD

Lieu

• Kenya

Description

The facility provides funding to KCB Bank Kenya to support micro and small enterprises impacting positively on gender equality and women's economic empowerment. Micro and small enterprises play a significant role in Kenya's economy, by providing goods, services and creating employment across all economic sectors. However, their growth opportunities are often limited, being often excluded from the traditional banking system, due to perceived higher credit risk and lower appetite by the formal financial institutions.

Additionality and Impact

The project aims to widen access to financial services for micro-enterprises throughout Kenya, particularly those owned and/or managed by women and contribute to the economic growth as well as poverty reduction in the country. Through the extension of a long-term credit facility to KCB Bank Kenya, the project will enable improved financing conditions for micro and women borrowers.

In Kenya, while overall access to finance is robust, microenterprises remain underserved by the financial sector. Perceived higher risk and inability to risk price the micro borrowers during the interest rate cap regime created barriers for the growth of this segment over the recent years. The EIB financing aims to address this financing gap and support a leading Kenyan bank with its strategy to increase its lending to microenterprises.

EIB financing is expected to be particularly additional by providing a long-term credit line in hard currency to KCB Bank Kenya, especially considering the ongoing foreign currency liquidity constraints in Kenya. The bank will benefit from improved maturity and diversification of its overall funding base which is otherwise funded mainly by short-term customer deposits. EIB facility will also have a strong signalling effect towards international lenders during market downturn and economic uncertainties.

The project aligns with the strategic priorities and policies set at the national, regional and EU level by addressing relevant market failures and complementing the overarching objectives such as inclusive growth, affordable finance, equal participation of women through the provision of intermediated financing to KCB Bank Kenya with significant outreach to EIB's target groups. Additionally, by following the 2x Challenge criteria, the project will contribute to EIB Group's Strategy related to Equality and the Empowerment of Women.

Objectifs

The aim is to enhance access to finance for the target beneficiaries and contribute to financial inclusion, supporting in particular those micro and small businesses owned or managed by women, in line with the 2X Challenge Criteria. As such, the operation is expected to achieve a high development impact.

Secteur(s)

• Lignes de crédit - Lignes de crédit

Under Global Europe NDICI guarantee

Under EFSD+ Guarantee

Montant BEI envisagé (montant approximatif)

EUR 15 million

Coût total (montant approximatif)

not applicable

Aspects environnementaux

Final beneficiaries will be requested to comply with applicable national and EU legislation, as appropriate.

Passation des marchés

Final beneficiaries will be requested to comply with applicable national and EU legislation, as appropriate.

Statut

Signé - 22/05/2024