Sector players from small and medium enterprises are calling on lenders to stop sidelining them when loaning stakeholders in a green transition drive pointing towards sustainability. Speaking during Diamond Trust Banks’ inaugural economic and sustainability forum on March 15, they noted that the SME sector lacks adequate access to green funding despite huge sums of funding coming from international donors.
The banks have been assuming SMEs on the basis of having inappropriate structures to meet funding requirements, instead of focusing on their capability as a sector towards sustainable production. The sector has been sidelined on the basis of improper tracking of business activities and having small loaning ticket sizes.
SMEs are notably crucial drivers in the economy with a contribution of about three percent of the country’s GDP. The sector is further projected to contribute up to 50 percent of the country’s GDP in the next three years.
Read: DFSAK Reports Ksh 500 billion disbursed to SMEs in 8 years
The players are thus urging the lenders to come up with mechanisms that would aggregate funding to the enterprises to back their efforts toward Environmental, Social and Governance strategies.
Amidst the forum, the lender announced its commitment to sustainability drive with a plan to grow its green lending portfolio to about 25 percent and achieve net zero carbon neutrality by 2030. It also plans to source at least 50 percent of its procurement needs from green vendors within its supply chain portfolio by 2030.
DTB’s Group Chairman Linus Gitahi thus committed to working closely with SMEs in realization of their sustainability goals, acknowledging the sector’s capabilities in driving change. Besides looking forward to net zero goals by 2030, sustainability strategy has been lauded to be a catalyst in promoting businesses growth and employment.
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