The eco.business Fund has extended a Sh805 million ($5 million) loan to Family Bank Kenya. This additional loan comes on top of the fund’s first investment of Sh1.6 billion ($10 million) in the bank in 2022 and focuses on the bank’s investments in fostering sustainable practices in agribusiness value chains.
The collaboration seeks 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.
According to eco.business Fund, Family Bank has been an ideal partner for the fund due to its focus on agribusinesses.
The bank has shown a significant increase in its agribusiness portfolio since the partnership with eco.business Fund began in early 2022, and the sector is at the center of the bank’s growth strategy.
“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,” said Family Bank CEO Designate Nancy Njau.
Leveraging its expansive branch network throughout the country, Family Bank is well-suited to fill financing gaps in sustainable agricultural value chains, especially with small and medium-sized enterprises (SMEs) and the retail sector representing a significant part of the bank’s clientele. 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.
Expressing enthusiasm for the collaboration, Michael Evers, Chairperson of the Board of Directors of the eco.business Fund, stated, “We are delighted to strengthen this promising 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.”
Agriculture is vital to Kenya’s economy, contributing 33 per cent of the Gross Domestic Product (GDP) and another 27 percent of GDP indirectly through linkages with other sectors, accounting for 65 percent of the country’s export earnings. The sector provides livelihood for over 80 per cent of the Kenyan population, including around 7.5 million smallholder farmers. By backing certified and sustainable agricultural producers in crucial exporting nations like Kenya, this investment aims to establish a consistent demand from developed markets, steering local producers towards more sustainable production methods.
“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,” concluded Nancy.