Co-operative Bank Group has received $10 million (Sh1 billion) to finance sustainable agriculture.
The investment will provide financing for businesses to enhance sustainable measures in their agricultural practices, particularly important in light of the challenging operating environment created by the Covid-19 crisis.
“Right from our founding as a bank for agriculture co-operatives, we have always strived to support farmers in their journey to achieve sustainable livelihoods,” said Co-op Bank Group managing director and CEO Gideon Muriuki.
Agriculture is the backbone of the Kenyan economy, employing approximately 75 per cent of the rural population, and making up 34 per cent of the country’s gross domestic product.
However, commercial lending to the agricultural sector remains disproportionally low.
This funding gap limits the ability of producers and processors to invest in sustainable production practices, further compounded by the economic fallout caused by the global pandemic.
The investment aims to provide financial resources to those that need it most, while simultaneously promoting conservation finance as mainstream.
Through this new investment, the eco.business Fund and Co-op Bank will provide necessary credit to sustainably certified agribusinesses, such as those in the coffee, tea, and horticulture sectors, Kenya’s main agricultural exports.
By financing green measures such as solar and hydroelectric installations for tea factories that reduce reliance on fuelwood, and cold storage solutions that reduce post-harvest losses, the partners hope to boost sustainable production practices and conserve the unique ecological landscape of the country.
“Only by providing tailored financing to the agricultural sector can we collectively promote green finance with the goal of generating positive environmental and social impact,” said Jens Mackensen, Chairperson of the Board of Directors of the eco.business Fund.
