The Co-operative Bank of Kenya has secured a long-term funding facility of USD 100 million (Sh14.2 billion) from a consortium of financial institutions led by DEG – Deutsche Investitions. The funding is aimed at supporting the growth of Micro, Small, and Medium-sized Enterprises (MSMEs) in Kenya. The facility has a tenure of seven years and has already been fully disbursed. The loan comes at a time when there has been an increase in private-sector credit in the Kenyan market. According to the Central Bank of Kenya, there has been strong credit growth in sectors such as manufacturing, transport and communication, trade, and consumer durables. The loan facility will enable Co-op Bank to meet the increased demand for financing from MSMEs.
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Gideon Muriuki, the Group Managing Director and CEO of Co-operative Bank, expressed appreciation for the funding, stating that it would better support their business and enhance customer satisfaction. He highlighted that the long-term tenure of the facility would allow the bank to provide better-structured solutions to meet the long-term financing needs of MSMEs. Monika Beck, a member of DEG’s management board, emphasized that the loan provided by DEG contributes to the development of Kenya’s financial sector and the overall economy. She mentioned that the funding aims to create jobs, generate local income, and align with the Sustainable Development Goals.
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Co-op Bank aims to leverage its strong balance sheet and partnerships with global development partners to enhance its growth opportunities and overall performance. The bank intends to improve its asset and liability matching by financing long-term loans with long-term debt. Additionally, it seeks to diversify its asset and funding portfolio, expand its client base, particularly among MSMEs, and enhance its competitive position through affordable lending. The DEG-led funding facility is seen as crucial support for Co-op Bank, especially as the bank undergoes a digital transformation journey with the recent transition to a new core banking system.
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