2023-10-11 14:16:00
(Ecofin Agency) – Credit applications from KCB Bank Kenya are currently being examined by the European Investment Bank. If the financing project is approved, this subsidiary of the East African group KCB Group will strengthen its loan portfolio for local MSMEs.
Kenyan commercial bank KCB Bank Kenya has requested two financing lines of 50 million euros ($53 million) and 15 million euros ($15.9 million) from the European Investment Bank (EIB). The European financial institution indicated on Tuesday October 10 that this financing was under review at the level of its board of directors.
The subsidiary 100% controlled by the East African financial group KCB Group wishes to obtain these 50 million euros to strengthen its loan portfolio, aimed at local private sector entities, particularly small and medium-sized enterprises (SMEs). The operation should support the investments and working capital needs of these SMEs which represent more than 90% of the workforce in the country.
The second line of credit, amounting to 15 million euros, was requested by KCB Bank Kenya with a view to strengthening its financing for micro, small and medium enterprises (MSMEs), very often excluded from the traditional banking system, due to the perceived high credit risk among them, and the lower appetite of formal financial institutions for these companies.
KCB Bank operates in the Kenyan banking market and the East African region, which comprises a total of 142 banks. Among East African countries, Kenya has the most advanced financial market, with a credit/GDP ratio of 30%. In its survey on the banking sector in Africa, published at the end of September 2023, the EIB estimates that 90% of banks in East Africa, including Kenya, plan to increase their financing activity over the next 12 months. of companies, both in local currencies and in foreign currencies. The document reveals that banks in this region expect an increase in demand for loans in local currencies. KCB Bank Kenya could therefore use this projection to increase its financing activity for local SMEs and MSMEs.
Chamberlain Moko
1697048177
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