Bill & Melinda Gates Foundation and EIB Initiate African Pilot Program to Enhance Capital Access for Female Entrepreneurs

Kenya's Female Entrepreneurs to Reap Benefits of €30 Million Microfinance Initiative from New Collaborative Effort

In a groundbreaking move, the Bill & Melinda Gates Foundation and the European Investment Bank (EIB) have joined forces to unveil a pioneering initiative aimed at bolstering the economic influence of women in Kenya. This transformative partnership targets critical obstacles to financial access, promising to empower thousands of women across the country.

Groundbreaking €30 Million Microfinance Program Unveiled in Kenya Through EIB Global and KCB Bank Partnership

In a significant stride towards gender equality and economic empowerment, the European Investment Bank (EIB) has allocated €15 million towards a pioneering microfinance initiative in Kenya. Teaming up with KCB Bank Kenya, the program is specifically designed to uplift women, with 80% of its beneficiaries targeted to be female.

This innovative pilot project aims to break down barriers to financial access by providing solutions for borrowers lacking collateral or credit history. It addresses the issue of high interest rates through risk-adjusted pricing and tailors digital services to meet the unique needs of female borrowers. Additionally, the initiative focuses on enhancing financial literacy.

Scheduled for launch in the coming weeks, the program will be overseen by KCB Bank Kenya, operating under its dedicated Female-Led and Made Enterprises (FLME) and KCB Foundation 2jiajiri initiatives. It promises to expand access to microfinance services across Kenya, while also serving as a blueprint for similar gender equality initiatives throughout Africa, as the partnership looks towards future expansion.

"In Africa, the necessity for increased and improved credit access for women to bolster their entrepreneurial endeavors is undeniable," remarked Greta Bull, Director of Women’s Economic Empowerment at the Bill & Melinda Gates Foundation. "The persistent disparity in credit access poses a significant obstacle, hindering both economic advancement and societal development, particularly for women in Kenya. Through this partnership, we aim to dismantle these barriers, providing women with access to affordable financing. This not only facilitates the establishment of businesses but also fuels broader economic expansion. It's a mutually beneficial endeavor that fosters both individual empowerment and overall economic growth."

"Women serve as the cornerstone of the African economy, with Africa boasting the highest percentage of women entrepreneurs globally," highlighted Thomas Östros, Vice President of the European Investment Bank. "Despite this, African women grapple with formidable obstacles such as exorbitant interest rates, a lack of collateral, and financial institutions inadequately attuned to their specific needs. This dynamic partnership, marrying philanthropic expertise and resources from the Bill & Melinda Gates Foundation with development finance from the EIB and the European Union, is poised to surmount these challenges. By doing so, it promises to empower women across Africa to seize newfound opportunities.

The groundbreaking gender-centric microfinance initiative spearheaded by KCB Bank Kenya sets a precedent in addressing the staggering $42 billion financing gap for female entrepreneurs in Africa, paving the way for transformative change."

"Mrs. Annastacia Kimtai, Managing Director of KCB Bank Kenya, emphasized the pressing need to unlock the economic potential of women, acknowledging the formidable hurdles they face. She highlighted challenges including the absence of tailored financial products, institutional capacity constraints, and a lack of incentives within banks to cater to women. Mrs. Kimtai underscored the immense opportunity for the financial sector to enhance its profitability by bridging the gender gap in banking. This entails prioritizing female financial inclusion through initiatives such as promoting financial literacy, embracing digital banking solutions, and facilitating access to credit."

"H. E Henriette Geiger, European Union Ambassador to Kenya, affirmed the joint dedication of Kenya and the European Union towards achieving gender equality. She hailed the transformative collaboration between the Bill & Melinda Gates Foundation, the European Investment Bank, and the European Union as a significant milestone. Ambassador Geiger emphasized that this partnership will not only enrich opportunities but also uplift the lives of thousands of women and their families in Kenya, with the potential for broader impact across the African continent in the future."

Addressing the Impediments to Gender-Equal Financial Access

Recent research underscores the urgent need to tackle both technical and financial barriers that hinder equal access to finance, particularly for women. A study conducted last year revealed a staggering $42 billion gender finance gap in Africa, stifling women's capacity to play a more substantial role in economic growth and societal transformation.

According to the 2023 EIB Financing in Africa survey, while progress is evident with 65% of African banks having a gender strategy in place, there remains substantial ground to cover. An additional 19% of banks are gearing up to implement such strategies soon. However, concerning lending to small and medium-sized enterprises (SMEs), the survey exposes significant disparities. Nearly 70% of banks surveyed admitted that less than 30% of their lending caters to female borrowers. Among the challenges cited, 50% of banks identified a lack of acceptable collateral as a major constraint, while 40% highlighted poor or incomplete credit history as a significant hurdle. These findings underscore the critical need for concerted efforts to address systemic barriers and promote gender parity in financial access across the continent.

The forthcoming pilot initiative is poised to tackle a spectrum of challenges hindering low-income women's access to financial resources. By extending technical support to KCB Bank Kenya, financial institutions will be equipped to leverage digital technology and data, alongside risk-sharing mechanisms, to mitigate the costs associated with loans for women.

In a recent development, the Gates Foundation issued a whitepaper shedding light on the obstacles and prospects concerning the provision of enhanced capital to Africa's women entrepreneurs, who have long been marginalized by formal financial institutions. This collaborative effort signifies a tangible stride towards bridging gender disparities and amplifying women's access to financing. Such partnerships are imperative in driving the expansion of microfinance initiatives not only within other East African nations but also throughout the broader African continent.

The inaugural facility receives vital support in the form of a partial guarantee from the European Union through the European Fund for Sustainable Development Plus (EFSD+). This initiative is an integral component of the Global Gateway strategy, aimed at fostering sustainable development and facilitating global connectivity.

Background information

European Investment Bank

The European Investment Bank (EIB) serves as the premier long-term lending institution of the European Union, collectively owned by its Member States. It plays a pivotal role in providing long-term financial assistance for viable investments, aligning with the overarching policy objectives of the EU.

Operating as the specialized arm of the EIB Group for initiatives beyond the EU's borders, EIB Global stands as a cornerstone of the EU's Global Gateway strategy. With a mandate to facilitate sustainable development, EIB Global aspires to bolster investments totaling at least €100 billion by 2027, representing a significant portion of the Global Gateway's overall target. Within the framework of Team Europe, EIB Global collaborates closely with other development finance institutions and civil society entities to cultivate robust, targeted partnerships. By maintaining a network of offices across the globe, EIB Global actively engages with local communities, businesses, and institutions, thereby enhancing the Group's impact on a global scale.

The EIB Group is steadfast in its commitment to integrating gender equality, with a particular emphasis on women's economic empowerment, into its operational framework. Moreover, it is dedicated to fostering gender parity within its own workplace environment.

In 2023 alone, the EIB Group allocated a substantial €5.8 billion in investments worldwide, making a significant impact on advancing gender equality. Notably, more than half of these investments concurrently supported initiatives aimed at combating climate change. This dual focus underscores the EIB Group's holistic approach to addressing pressing global challenges while championing gender equality as a fundamental pillar of its mission.

Bill & Melinda Gates Foundation

Driven by the principle that every individual's life holds equal worth, the Bill & Melinda Gates Foundation is committed to fostering healthy, productive livelihoods for all. With a primary focus on developing nations, the foundation endeavors to enhance healthcare systems and provide pathways for communities to overcome hunger and extreme poverty. Similarly, within the United States, it strives to ensure equitable access to opportunities, particularly for those facing socio-economic disparities, enabling them to thrive academically and in their broader life pursuits.

Headquartered in Seattle, Washington, the foundation is helmed by CEO Mark Suzman, operating under the guidance of Co-Chairs Bill Gates and Melinda French Gates, alongside a dedicated board of trustees. Through strategic initiatives and partnerships, the foundation endeavors to effect positive change on a global scale, driven by a vision of a world where all individuals have the chance to lead fulfilling lives.

About KCB Bank Kenya

KCB Bank Kenya Limited stands as the largest commercial bank in Kenya, operating as a subsidiary of KCB Group Plc. Renowned for its extensive reach, the bank boasts the most extensive branch network in the nation, comprising over 200 branches, 367 ATMs, and a network of 16,000 agents offering banking services across East Africa on a round-the-clock basis.

In addition to its physical presence, KCB Bank Kenya provides customers with convenient access to banking services through mobile and internet banking platforms. Moreover, the bank ensures continuous customer support with its 24-hour contact center services.

As part of the KCB Group Plc, which extends its footprint across various countries including Uganda, Tanzania, South Sudan, Burundi, Rwanda, DRC Congo, with representative offices in Ethiopia and Brussels, KCB Bank Kenya leverages a broad network of correspondent relationships comprising over 200 banks worldwide. This ensures seamless facilitation of international trade requirements for customers, regardless of their location.

Source: eib‍