The financing is dedicated to promoting sustainable use of natural resources, biodiversity preservation, and climate change adaptation across agricultural value chains in Kenya.
The eco.business Fund has extended a USD 5 million loan, equivalent to KES 805 million, to its partner in Kenya, Family Bank 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.
In 2022, the fund invested USD 10 million in the Bank which was directed towards fostering sustainable practices in agribusiness value chains.
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.”
Food and Agriculture Organization of the United Nations statistics show that despite agriculture being vital to Kenya’s economy by contributing 33 per cent of the Gross Domestic Product, the vast majority of Kenya’s 7.5 million smallholder farmers, according to the International Fund for Agricultural Development, still live on less than USD 6 a day, just half the country’s living-income threshold.
“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,” said Family Bank CEO Designate Nancy Njau.
“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,” she concluded.
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. 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.
Shedding light on the partnership, Maxine Chehab, Investment Manager at the fund’s advisor Finance in Motion said “We are impressed with the growth potential and dedication of Family Bank as it has managed to not only grow but diversify its portfolio significantly since the beginning of our partnership. We’re glad to keep supporting them on their growth journey through financing and tailored technical assistance in areas like implementing a robust Environmental and Social Risk Management System (ESMS), and overall strategy implementation.”