NCBA Group has tapped a $50 million (Sh6.73 billion) loan from French development finance institution Proparco for on-lending to small and medium-sized enterprises (SMEs) and those whose activities help combat climate change.

The lender says that 60 percent of the money will go to SMEs while 40 percent will be directed to businesses committed to combating climate change risks.

NCBA's chief executive John Gachora said the long-term financing fits into the lender’s sustainability agenda that among others seeks to mobilise money towards green financing and grow loans to women and youth.

“As NCBA, collaborative efforts and strategic partnerships are integral to the value that we deliver to all our stakeholders," Mr Gachora said.

"I believe that with this partnership, we will deepen our shared goals to foster sustainable economic development and advance the cause of green finance, women empowerment, and SME growth," he said.

Proparco is a subsidiary of Agence Française de Développement (AFD) Group, a French development agency that is focused on private sector development. NCBA had a €7.8 million (Sh1.14 billion) loan from AFD, with a €5.5 million (Sh804 million) principal balance at the end of December 2022.

East Africa head of Proparco, Audrey Maignan, said the funding will benefit at least 1,600 SMEs, aligning with NCBA’s goal of expanding its lending to small businesses and women-led entities.

“We are strongly confident that this renewed partnership will pave the way for long and fruitful collaboration in areas such as climate change mitigation and adaptation,” said Ms Maignan. She said that Proparco has between 2022 and 2023 channeled €200 million (Sh29.2bn) to the Kenyan economy, mostly through banks, and will soon be announcing another funding.

NCBA in 2022 settled $55 million (Sh7.4 billion) loans borrowed from IFC, cutting its borrowings by 31 percent to Sh4.21 billion end of December 2022.