Home Banking & Finance Co-op Bank draws sh14 billion to fund loans to small-scale enterprises

Co-op Bank draws sh14 billion to fund loans to small-scale enterprises

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The Co-operative Bank of Kenya
The Co-operative Bank of Kenya


The Co-operative Bank of Kenya has secured a long-term loan of $100 million (Sh14.14 billion) from a consortium of financial institutions led by DEG. The loan will be used to provide funding to micro, small, and medium-sized enterprises (MSMEs) in Kenya. DEG, a development finance institution based in Germany and a subsidiary of KfW Group, acted as the lender, mandated lead arranger, and facility agent for the seven-year tier II facility.

Other members of the consortium include the Africa Agriculture & Trade Investment Fund, Micro Small Medium Enterprises Bonds, Finnfund, Norfund, and the co-financing facility European Financing Partners. Gideon Muriuki, the managing director of Co-operative Bank Group, expressed the importance of the funding in supporting their business customers. The long-term tenure of the facility will enable the bank to offer better-structured solutions to meet the financing needs of MSMEs.

The loan from DEG aligns with the bank’s digitization strategy, which includes transitioning to a new core banking system. Monika Beck, a board member at DEG, emphasized that the funding contributes to the development of Kenya’s financial sector and the overall economy. Co-op Bank has been actively seeking long-term financing from global partners to enhance growth opportunities.

In December, the bank’s long-term borrowings amounted to Sh48.1 billion, with significant contributions from the International Finance Corporation, European Investment Bank East Africa, AFD Microfinance, and Kenya Mortgage Refinance Company.

Additionally, Co-op Bank’s subsidiary, Kingdom Bank, secured an interest-free loan of Sh24 billion from the Central Bank of Kenya. The bank reported a 4.7 percent increase in net profit to Sh6.1 billion in the first quarter of the year, driven by growth in interest income from loans.