EBRD grants $100m facility to expand MSME lending in Kenya

The European Bank for Reconstruction and Development (EBRD) has approved a $100 million loan to KCB Bank Kenya to expand financing for micro, small and medium-sized enterprises (MSMEs). The facility prioritizes underserved segments, including women- and youth-led businesses, while accelerating Kenya’s green transition through increased climate-focused lending.

Key highlights

• 35% of the facility is earmarked for women- and youth-led enterprises.
• 30% will support eligible green projects, such as renewable energy, energy efficiency and climate-smart solutions.
• KCB Bank will receive technical assistance—training, advisory support and specialist expertise—to strengthen its green lending capabilities.
• The loan, equivalent to approximately €85 million, is intended to broaden access to affordable credit across Kenya’s MSME sector.

Why it matters

MSMEs drive employment and economic activity across Kenya but continue to face persistent financing gaps, particularly for women and young entrepreneurs. By partnering with a leading local bank, the EBRD aims to channel capital where it can have the greatest impact—supporting job creation, business resilience and inclusive growth—while aligning new investments with the country’s climate goals.

How the facility will work

The credit line will be deployed by KCB Bank to extend loans to MSMEs nationwide, with clear allocation targets for inclusion and sustainability. The technical assistance package will help the bank scale climate-related lending by improving project assessment, pipeline development and risk management for green finance. This support is intended to boost the volume and quality of environmentally sustainable projects financed under the programme.

What they said

This is our first investment in Kenya’s financial sector. By partnering with KCB Bank, we are helping to channel much-needed financing to MSMEs, which are engines of job creation and economic growth. We are particularly pleased that this facility will support the transition to a greener economy and increase opportunities for women and young entrepreneurs, whose success is critical to Kenya’s long-term prosperity.

— Heike Harmgart, EBRD Managing Director for Sub-Saharan Africa

This facility will strengthen our capacity to extend affordable financing to SMEs—particularly those who have traditionally faced barriers in accessing credit. We remain committed to sustainable finance by increasing investments in renewable energy, climate-smart agriculture and other green projects that contribute to Kenya’s climate ambitions while creating long-term economic value.

— Annastacia Kimtai, Managing Director, KCB Bank Kenya

Context

The EBRD began investing in Kenya in 2025, with a strategy centered on private-sector development, financial inclusion, sustainable infrastructure and the green transition. Partnering with commercial banks is a core element of this approach, enabling broader outreach to MSMEs while embedding climate considerations in lending portfolios.

Outlook

By combining targeted capital with institutional know-how, the facility is positioned to expand credit access for businesses that often struggle to secure financing, accelerate green investments and support a more inclusive recovery. The initiative underscores the role of blended finance and capacity building in unlocking growth and resilience across Kenya’s MSME ecosystem.

Bottom line

The $100 million EBRD facility strengthens KCB Bank’s ability to lend to MSMEs, expands opportunities for women and young entrepreneurs and scales up climate-aligned investments—advancing both inclusive growth and the country’s green transition.