While Kenya is trying to make its large corporations and big businesses moonlight as VCs, banks, too, have been turning to eco-warriors. KCB, Kenya’s largest bank by assets, committed KES53.2 billion ($411 million) to finance green projects this year.
Banking on sustainability: So far, 21.32% of KCB’s loan portfolio qualifies as green, as the bank pushes toward its 25% target for the year. The money supports renewable energy, climate-smart farming, green housing, and clean transport. It also funds small women- and youth-led businesses, helping communities adapt to climate change while building local economies, according to Paul Russo, KCB Group CEO.
Catch up: In April, the Central Bank of Kenya (CBK) gave lenders 18 months to start reporting the environmental impact of their financing under the new Kenya Green Finance Taxonomy (KGFT). The guidelines define what counts as “green” and aim to move capital toward cleaner, low-emission investments in the country.
Why it matters: KCB leads other banks in sustainability financing. Its drive shows that while cutting lending rates remains a contentious issue in the banking sector, the big boys, at least, have no problem supporting real impact projects. This would effectively make it twice as likely for entrepreneurs and small businesses building in this area to secure loans.
KCB’s growing green portfolio could inspire more banks to unlock funds for this reason as they race to meet KGFT demands and deadlines.
