The European Investment Bank (EIB Global) has committed Sh16 billion for onwards lending to small and medium enterprises (SMEs), youth, and women in Kenya.

As part of the deal, KCB Bank Kenya will match a similar amount into the initiative.

The ‘Investing in Young Businesses in Africa’ (IYBA) program is sub-categoried into three segments, with one of them being women-led/owned microenterprises, which will get Sh4.1 billion.

While Sh14 billion has been set aside for SMEs (also run or owned by women) to aid in working capital and new investments, the remaining balance of Sh14 billion targets inclusive growth and youth employment opportunities, with a focus on businesses led/founded by young entrepreneurs or employing at least 40 percent young people.

Similarly, one-third of the financing to the lender will be allocated to beneficiaries in the agriculture sector value chain.

“We are scaling our interventions to build a strong and vibrant SME sector to provide a strong foundation in our efforts to lift communities,” KCB Group CEO Paul Russo said.

“We are increasingly addressing the barriers that hinder their growth and use this funding to provide tailored financial solutions, business mentorship, and capacity-building initiatives to ensure that SMEs are not only surviving but thriving in the dynamic marketplace,” he added.

The project will also receive technical assistance from the Gates Foundation on a range of issues that limit women with low incomes from accessing finance, including a lack of collateral or credit history.

“Micro, small and medium-sized businesses are the economic lifeblood of Kenya but are more vulnerable to crises than larger enterprises,” EIB Vice President Thomas Ostros stated.

“The lack of adequate, affordable financing puts significant pressure on private lending, which in turn has entrepreneurs and small companies at a disadvantage,” the VP continued.

“We believe that this new partnership will help spur private sector growth, gender equality, youth empowerment, promotion of sustainable job opportunities, and reduction of poverty.”

The IYBA initiative, which is supported by various EU Member States and their financial institutions, provides capital for startups and early-stage businesses, among others.