Press release -
Swedish funding to Co-operative Bank of Kenya enables growth in the private sector
Swedfund provides a USD 15 million long-term subordinated loan to Co-operative Bank of Kenya (“Co-op Bank”) to support the Bank’s lending to small and medium-sized enterprises (SMEs) and green finance projects. By supporting Co-op Bank, Swedfund will contribute to job creation and private sector development. Almost half of all SMEs in Kenya are women-owned businesses which contribute to around 20% of Kenya’s GDP.
In the context of the ongoing COVID-19 pandemic, it is increasingly important that banks and other financial institutions continue to support small and medium-sized enterprises, and hence the entire economies through continued lending. Co-Op Bank’s on-lending to SMEs is welcomed particularly in light of the pandemic and its effects on SMEs and female entrepreneurs.
- As a Development finance institution, we have an important role in supporting strong and healthy financial institutions like Co-op Bank to help them to continue lending to local businesses and entrepreneurs. By providing long-term funding to Co-op Bank that has its background and strong footprint in rural areas with a clear and focused agenda for SMEs - and green finance we can support inclusive and sustainable growth, in particular in the currently challenging environment. In addition, we can enhance our partners’ consideration of ESG- risks and impact of lending by agreeing on a plan of action and assist in advancing Co-op Bank’s further work in this area, says Maria Håkansson, CEO at Swedfund.
Co-op Bank is Kenya’s 4th largest bank in terms of assets with a substantial nationwide presence outside key cities through its network of 159 branches, 584 ATMs, and over 16,000 banking agents, catering to 8.8 million customers. The Bank has its roots in the cooperative movement and has a long history of lending to savings and cooperative societies (SACCOS), which have been vital in proving financial services to members who are otherwise unserved by traditional banks.
Co-op Bank has raised a total of USD 75 million from a consortium led by the IFC to enable the Bank’s continued growth and strengthen its capitalization. Swedfund invests USD 15 million as a long-term subordinated loan (Tier II loan).
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About Swedfund
Swedfund is Sweden's development finance institution for sustainable investments in developing countries. In order to achieve the goal: a world without poverty, more jobs are required in the private sector and that access to renewable energy is increasing. Investments are therefore made within energy & climate, health and to reach small and medium-sized companies.
As a state-owned company, Swedfund is managed by the Ministry of Enterprise and Innovation. The operations are financed partly through capital injections for which the Ministry of Foreign Affairs is responsible and through reflows from the own portfolio. Swedfund was founded in 1979 and has since the start made more than 240 investments in more than 60 countries.
