eco.business Fund and Family Bank bolster partnership with further USD 5 million loan for agribusinesses
Luxembourg and Nairobi, 06 February 2024 -The eco.business Fund has extended a USD 5 million loan, equivalent to KES 805 million, to its partner Family Bank Kenya. This additional loan comes on top of the fund’s first investment of USD 10 million in the bank in 2022 and is directed towards supporting the bank’s growth strategy, with a particular focus on 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.
Family Bank, a renowned player in Kenya's banking industry, 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. 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 percent 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 [1]. The sector provides livelihood for over 80% of the Kenyan population, including around 7.5 million smallholder farmers [2]. 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,” 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.
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.”
Anticipated to advance the fund's overarching mission, this investment aligns with promoting business and consumption practices contributing to biodiversity conservation and climate action (both adaptation and mitigation). Furthermore, it is poised to make substantial contributions to achieving Sustainable Development Goals (SDGs) SDG 2 (Zero Hunger), SDG 8 (Decent Work and Economic Growth), SDG 13 (Climate Action), SDG 15 (Life on Land), and SDG 17 (Partnerships for the goals).
[1] Food and Agriculture Organization of the United Nations
[2] International Fund for Agricultural Development
About Family Bank
Family Bank is a financial institution that prides itself in growing a strong retail customer base with a key focus on SME banking anchored on the positive transformation of people’s lives in Africa. Family Bank is the fifth-largest bank in Kenya, in terms of branch network with 95 branches across 32 counties. The Bank has over 750,000 customers, 4,900 bank agents, and over 8,000 merchants countrywide with total assets of KES 140 billion and a deposit base of KES 108 billion as at 30 November 2023.
Family Bank prides itself in being a digitally innovative bank having been the first bank to introduce paperless banking through smart card technology and mobile banking, PesaPap, in Kenya and the first to launch the mVisa service in Africa.
In 2021 Family Bank received two awards; Financial Communication Campaign of the Year and Overall Public Relations Campaign of the Year at the 2021 Public Relations Society of Kenya Annual Awards for Excellence for the Corporate Bond Campaign where the Bank raised KES 4.42 billion via public placement marking a subscription of 147.3%. In 2021, Family Bank was voted as the Best Overall Bank and Best Tier Two Bank for Customer Responsiveness and Satisfactory Digital Experience. Previously in 2020, the Bank was voted Best Tier Two Bank and the overall second-best bank in Digital and Customer Experience in the Kenya Bankers Association Customer Satisfaction Survey.
Other awards include Best SME Bank in Kenya at the annual Banker Africa Awards 2017, East Africa –an award initiative for financial institutions in Africa, Think Business Fastest Growing Bank Award three years in a row between 2013 and 2015 and the Think Business Best Bank in Micro-Finance Award, 1st Runner-up in 2013 and 2014. For more information about Family Bank, please visit: www.familybank.co.ke
About the eco.business Fund
The eco.business Fund aims to promote business and consumption practices that contribute to biodiversity conservation, to the sustainable use of natural resources, and to mitigate climate change and adapt to its impacts in Latin America, the Caribbean, and sub-Saharan Africa. By providing financing for business practices that conserve nature and foster biodiversity, the fund seeks investments with both environmental and financial returns. The eco.business Fund provides financing through three avenues: local financial institutions that are committed to the fund’s mission and which have the capacity to reach its target group; directly to its target group (i.e. companies and producers); and in the case of sub-Saharan Africa, to real sector intermediaries. The fund supports sustainable operations in the sectors of agriculture, fishery (including aquaculture), forestry and tourism. Target beneficiaries are those that hold an eligible sustainability certification or those taking out a loan to make eligible sustainable investments in their operations.
Operating together with each of the two sub-funds, are two development facilities that provide high-impact technical assistance to investment partners and final borrowers.
An impact investment fund advised by Finance in Motion, the eco.business Fund was initiated by Germany’s KfW Development Bank and Conservation International with financial support from the German Federal Ministry for Economic Cooperation and Development (BMZ).
The sub-fund for sub-Saharan Africa was formally launched in 2020 with initial funding from BMZ.
The sub-fund for Latin America and the Caribbean has received funding from the European Commission as well as from numerous other prestigious development finance institutions and institutional investors.
For more information please visit www.ecobusiness.fund and follow us on Twitter @ecobusinessfund
About Finance in Motion
Finance in Motion is a global impact asset manager focused exclusively on sustainable development in emerging markets and developing economies. The company structures, manages, and advises impact investment funds that bring together public and private investors to address climate change, strengthen biodiversity conservation, foster the sustainable use of natural resources, improve livelihoods, and promote economic opportunities.
For more information, please visit us at: www.finance-in-motion.com
You can also follow us on Twitter @financeinmotion and on LinkedIn
Media contact eco.business Fund
Anne Johnson
Email: press@ecobusiness.fund
Phone: +49 69 271 035 742
Media contact Family Bank Kenya
Grace Wangari
Email: grace.wangari@tim-skymedia.com
Phone: +25 4714821008