One of East Africa’s largest financial institutions, Co-operative Bank Group, has secured €50 million ($56.4 million) from the European Investment Bank (EIB) to provide support for small and medium enterprises hit by the adverse effects of the COVID-19 pandemic.
The funding, which will be disbursed by the Muriuki-led Co-operative Bank Group, will form part of the €400-million EIB East Africa COVID-19 Rapid Response, a credit facility created to support businesses in those sectors of the economy most impacted by the pandemic.
The €50-million ($56.4 million) facility issued by the EIB to Co-operative Bank Group will be used to provide working capital and long-term local currency loans to businesses impacted by COVID-19.
When deployed by Co-operative Bank, the credit facility will channel investment into fragile regions across East Africa, strengthen businesses and housing investment, and provide a soft landing for companies in conflict-hit countries throughout the region.
EIB President Werner Hoyer said the facility will boost investments, strengthen economic resilience and allow Kenyan companies to harness growth opportunities.
“COVID-19 has dramatically impacted business activity across Kenya and ensuring new investment is essential to help companies recover from the pandemic,” he said.
Muriuki, the CEO of Co-operative Bank Group, said the facility is part of its commitment to SMEs in Kenya and will be made available immediately to contribute to the economic recovery following COVID-19.
“The credit facility will be available for up to a maximum of KSh1.5billion ($13.3 million) per customer for a maximum tenor of seven years,” he said.
Businesses employing up to a maximum of 250 employees can apply immediately.
The EIB is an EU long-term lending institution and the world’s largest international public bank.
It provided more than €5 billion ($44.5 million) in 2020 for new investments across Africa in line with its commitment to the continent.