A new partnership between Gideon Muriuki’s Co-operative Bank (Co-op Bank) and the German impact investment fund eco.business will offer affordable loans to Kenyan agribusinesses.
The bank secured a $10-million investment from the fund for financing and on-lending to sustainable agribusiness to help companies weather the COVID-19 pandemic.
Muriuki said: “Right from our founding as a bank for agriculture co-operatives, we have always strived to support farmers in their journey to achieve sustainable livelihoods.”
According to a press release, the deal is the fund’s first-ever investment in Kenya and will further its overall mission to promote eco-friendly projects internationally.
In Kenya, agriculture is an essential sector of the economy, accounting for 65 percent of its export earnings and creating livelihood for more than 80 percent of its population.
A UN Food and Agriculture Organization report indicated that Kenya’s agricultural sector is the principal driver of other economic sectors, including manufacturing. It provides inputs and markets for their operations. These sectors include building and construction, transportation, tourism, education and other social services.
The partnership will provide loans structured to suit the financing cycles of agriculture. It also comes with support mechanisms to help farmers make a successful move toward sustainable and climate-smart agriculture.
Co-op Bank operates corporate and retail banking, investment and asset management services in Kenya. In 2020, The EastAfrica reported that the bank’s net profit for nine months preceding Sept. 30 dropped by 10 percent due to reduced banking transactions and increased provisioning to cushion against the pandemic-led economic disruption.
Reuters also reported that Co-op Bank’s 2020 net interest income was Kshs 36.35 billion ($334 million) compared to Kshs 31.30 billion ($287.40 million) a year before. Its group profit before tax was also recorded as Kshs 14.28 billion ($131.13 million) against Kshs 20.71 billion ($190.2 million).