The European Investment Bank (EIB), through its development arm EIB Global, is providing a €50 million (Sh7.18 billion) loan to Family Bank, with the Kenyan lender matching the amount to provide a total financing of €100 million (14.3 billion) to small and medium-sized enterprises owned by women and youth.
In a joint statement, the partners said at least 50 percent of the financing will target businesses owned or run by women while a further minimum of 30 percent will be extended to youth entrepreneurs.
“SMEs represent over 80 percent of our customer base. As a result of our growth efforts, our market revenue from this segment continues to increase, further underscoring the sector’s strong growth potential,” said Family Bank CEO Nancy Njau.
In addition to the credit line, EIB Global has also committed to provide Family Bank with technical assistance to enhance its gender strategy and product offering, in a move that Ms Njau says will help the lender offer ‘holistic support’.
Part of this will include potential certification under a 2018 initiative dubbed 2X challenge that was launched by development and multilateral finance institutions to invest in women worldwide.
“We recognise that beyond access to financing and investment opportunities, small businesses, especially those led by women, also need education, information and networking opportunities with like-minded enterprises,” said Njau.
On its part, EIB Global said the agreement is part of the European Union’s Global Gateway strategy that seeks to promote trade, manufacturing, agriculture and climate action which are top priorities in Kenya.
“The financing partnership we now have with Family Bank will inject much-needed capital into Kenya’s private sector to support businesses and create employment,” said EIB Vice President Thomas Ostros.
“Investing in women and youth entrepreneurs is not only the right thing to do but also the smart thing to do. It holds much promise to bring growth and prosperity to the Kenyan economy.”
The deal is the latest and fourth of a series of agreements that the two institutions have entered into in recent years, in a period the Kenyan bank has turned to multi-pronged capital raising strategy – a mix of equity and debt – to bankroll growth.
