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The Cooperative Bank benefits from a loan of 14 billion shekels to lend to small businesses
Friday, July 14, 2023
The Co-operative Bank CEO, Gideon Moriuki. file image | NMG
The Co-operative Bank of Kenya has received a long-term loan of $100 million (Sh 14.14 billion) from a consortium of financial institutions led by DEG to lend to micro, small and medium-sized enterprises (MSMEs) in Kenya.
The lender said on Friday it had secured a seven-year tier two facility where DEG, a Germany-based development finance institution and subsidiary of the KfW Group, acted as lender, mandated lead coordinator and facility agent.
Other financiers in the consortium include the African Agricultural and Trade Investment Fund, SME Bonds and European development finance institutions such as Finnfund and Norfund and the European Funding Partners of the joint financing facility.
“The funding by DEG and the union is timely given the urgent need to better support our commercial clients,” said Gideon Moriuki, Managing Director of The Co-operative Bank Group.
The lender said the long-term tenure of this facility has greatly enhanced its ability to provide better structured solutions to meet the long-term financing needs of MSMEs.
The DEG-led facility comes as the bank deepens its digitization strategy with the recent move to a new $50 million (Sh7.07 billion) core banking system.
“By serving as lead coordinator and providing the secondary loan to the Co-operative Bank, DEG is contributing to the further development of Kenya’s financial sector and the wider economy through job creation and local income,” said Monica Beck, Member of the Board of Directors at DEG. .
The DEG financing represents the latest round of long-term financing that The Co-operative Bank has been leveraging from global partners to enhance growth opportunities and overall performance.
The cooperative closed the month of December with long-term loans amounting to 48.1 billion shekels, compared to 42.9 billion shekels at the end of the previous year.
Long-term long-term borrowing from the IFC was Sh15.55 billion, followed by Sh6.9 billion from the European Investment Bank in East Africa, Sh1.16 billion from AFD Microfinance and Sh467.45 million from Kenya Mortgage Refinancing Corporation.
The Co-op’s Kingdom Bank also benefited from an interest-free loan of Ksh24 billion from the Central Bank of Kenya.
is reading: Small and medium enterprises obtain state-backed loans worth Sh4.6 billion
The Nairobi Stock Exchange-listed company reported a 4.7 percent jump in net profit to Sh6.1 billion in the first quarter ended March, on the back of growth in interest income from loans.
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