(3 minutes read)
A group of financial institutions led by DEG (Deutsche Investitions) lent a long-term loan of US$100 million (Sh14.14 billion) to the Co-operative Bank of Kenya for disbursing future loans to MSMEs in Kenya. DEG advises and finances companies in East Africa and provides banks and investment companies with long-term funds to enable them to supply local enterprises
A group of financial institutions led by DEG (Deutsche Investitions) lent a long-term loan of US$100 million (Sh14.14 billion) to the Co-operative Bank of Kenya for disbursing future loans to MSMEs in Kenya. DEG advises and finances companies in East Africa and provides banks and investment companies with long-term funds to enable them to supply local enterprises. MSMEs in East African countries, particularly Kenya, do not have a proper accounting system. Around 30 percent of SMEs’ turnover (4.7 billion euros) is lost annually due to cash transactions because of this. DEG, as a development partner also focuses on climate change and private-sector lending.
Headquartered in Germany and a division of KfW Group, DEG sources funds from organizations like the Micro Small and Medium Enterprises Bonds, the European Development Finance Institutions Finnfund, and Norfund. The European Financing Partners is also part of the consortium. The bank recently switched to a new US$50 million (Sh7.07 billion) core banking system to deepen its digitalization ambition. DEG, which accesses funds from international donors helps the local economy and financial sector in Kenya grow by generating employment and income.
Kingdom Securities Ltd., Co-op Trust Investment Services Limited, Co-op Consultancy and Bancassurance Intermediary Ltd., Kingdom Bank Limited, and Co-operative Bank of South Sudan are the five subsidiaries that make up the Co-operative Bank Group. In addition, the Bank has a 25% equity share in Co-op Bank Fleet Africa Leasing Limited and a 24.8% holding in CIC Insurance Group.
The Bank has a low cost-to-income ratio and recorded strong profitability in the first quarter of this year empowering its lending capacities, which is presently pegged at a high of Sh112.6 billion, an increase of 9.7% from Sh102.7 billion as of the end of the previous year. The Bank had long-term borrowings valued at US$48.1 billion at the end of December. International Finance Corporation (IFC) had the largest outstanding long-term loan at Sh15.55 billion, followed by the European Investment Bank East Africa (US$6.9 billion), AFD Microfinance ($1.16 billion), and Kenya Mortgage Refinance Company (US$467.45 million). Kingdom Bank, a division of Co-op, also obtained a Sh24 billion interest-free loan from the Kenyan central bank.
Read Also:
https://trendsnafrica.com/iran-signs-five-agreements-with-kenya-during-raisis-visit/
https://trendsnafrica.com/kenya-gives-free-access-to-people-of-congo-brazzaville/
https://trendsnafrica.com/kenya-to-increase-vat-on-fuel/
DEG, has a significant focus on climate and its effects. DEG also provides finance, guidance, and assistance to private-sector businesses that operate in developing and emerging-market nations.
