Family Bank has received $5 million (Ksh.805) million loan boost from its partner eco.business.
A statement seen by The Kenya Times indicated that the financing is dedicated to promoting sustainable use of natural resources, biodiversity preservation, and climate change adaptation across agricultural value chains in Kenya.
“The eco.business Fund has extended a USD 5 million loan, equivalent to KES 805 million, to its partner in Kenya, Family Bank to bolster sustainability-certified companies, small-holder farmers and other agribusiness value chain actors embracing eco-friendly and climate-smart approaches to enhance the competitiveness of agribusinesses,” read the statement.
Chairperson of the Board of Directors of the eco.business Fund Michael Evers expressed enthusiasm for the partnership with Family Bank Kenya.
“Together, we aspire to enhance support for agribusinesses in Kenya. We seek to adopt sustainable practices, playing a pivotal role in biodiversity conservation, sustainable resource utilization, and climate change mitigation and adaptation in this biodiverse region,” said Evers.
Family Bank-eco.business Fund
According to the International Fund for Agricultural Development, majority of Kenya’s 7.5 million smallholder farmers, still live on less than $6 (Ksh.960) a day.
This is half the country’s living-income threshold despite agriculture being vital to Kenya’s economy by contributing 33 per cent of the Gross Domestic Product (GDP).
“The agricultural sector is very crucial to the achievement of meaningful sustainable development. As a homegrown Bank, we have been deliberate in widening our capital base and scaling up lending to this sector, particularly through partnerships,” said Family Bank CEO Designate Nancy Njau.
“Our partnership with eco.business fund has been a testament to our continued commitment to supporting the growth of local markets by providing end-to-end value. We have recorded a significant increase of 25 per cent in our agribusiness portfolio following such partnerships and we are confident that now we can scale up lending to agribusinesses and bridge their financial need to scale climate-smart agriculture technologies to enhance climate resilience,” she concluded.
This investment aims to establish a consistent demand from developed markets, steering local producers towards more sustainable production methods.
Notably, this partnership aligns with the eco.business Fund’s mission to combat climate change and preserve biodiversity, as it enables the fund to engage with a diverse range of agribusiness value chains and actors and promote sustainable practices across them.
“We are impressed with the growth potential and dedication of Family Bank as it has managed to not only grow but diversify its portfolio significantly since the beginning of our partnership.
We’re glad to keep supporting them on their growth journey through financing and tailored technical assistance in areas like implementing a robust Environmental and Social Risk Management System (ESMS), and overall strategy implementation,” said Maxine Chehab, Investment Manager at the fund’s advisor Finance in Motion.
In 2022, the fund invested $10 million (Ksh.1.6 billion) in the Bank which was directed towards fostering sustainable practices in agribusiness value chains.
About the eco.business Fund
The eco.business Fund aims to promote business and consumption practices that contribute to biodiversity conservation, to the sustainable use of natural resources, and to mitigate climate change and adapt to its impacts in Latin America, the Caribbean, and sub-Saharan Africa.
By providing financing for business practices that conserve nature and foster biodiversity, the fund seeks investments with both environmental and financial returns.
The eco.business Fund provides financing through three avenues: local financial institutions that are committed to the fund’s mission and which have the capacity to reach its target group; directly to its target group (i.e. companies and producers); and in the case of sub-Saharan Africa, to real sector intermediaries.
The fund supports sustainable operations in the sectors of agriculture, fishery (including aquaculture), forestry and tourism.
Target beneficiaries are those that hold an eligible sustainability certification or those taking out a loan to make eligible sustainable investments in their operations.
Operating together with each of the two sub-funds, are two development facilities that provide high-impact technical assistance to investment partners and final borrowers.
An impact investment fund advised by Finance in Motion, the eco.business Fund was initiated by Germany’s KfW Development Bank and Conservation International with financial support from the German Federal Ministry for Economic Cooperation and Development (BMZ).
The sub-fund for sub-Saharan Africa was formally launched in 2020 with initial funding from BMZ.
About Finance in Motion
Finance in Motion is a global impact asset manager focused exclusively on sustainable development in emerging markets and developing economies.
The company structures, manages, and advises impact investment funds that bring together public and private investors to address climate change, strengthen biodiversity conservation, foster the sustainable use of natural resources, improve livelihoods, and promote economic opportunities.
Family Bank is a financial institution that prides itself in growing a strong retail customer base with a key focus on SME banking anchored on the positive transformation of people’s lives in Africa.
It is the fifth-largest bank in Kenya, in terms of branch network with 95 branches across 32 counties.
The lender has over 750,000 customers, 4,900 bank agents, and over 8,000 merchants countrywide with total assets of Ksh.140 billion and a deposit base of Ksh.108 billion as of November 30, 2023.
Family Bank prides itself in being a digitally innovative bank having been the first bank to introduce paperless banking through smart card technology and mobile banking, PesaPap, in Kenya and the first to launch the mVisa service in Africa.