Swedfund invests in Kenyan bank with SME focus
Introduction
The Swedish Development Finance Institution, Swedfund, invests 5 million USD in the Kenyan bank Victoria Commercial Bank, VCB. The loan is directed at the bank’s small and medium-sized enterprises, SMEs, and is part of Swedfund’s mission to reduce poverty through sustainable business.
– Well-run banks play a central role in creating decent jobs, economic growth and sustainable development, said Maria Håkansson, CEO, Swedfund. In Sub-Saharan Africa small and medium sized enterprises stand for about 80 percent of jobs, and the loan to VCB is a way for Swedfund to contribute to the development of SMEs in Kenya.
The financial sector is crucial for a country’s economic development, but the availability of loans and financial services in developing countries is limited. By investing in banks and funds Swedfund contributes to job creation, sustainable businesses and financial inclusion.
In the VCB investment, Swedfund will assist in the implementation of an Environmental and Social Management System (ESMS). Among others the ESMS will ensure working conditions and environmental impact are systematically handled in the bank's activities and loans. This is well-aligned with Swedfunds three pillars; impact on society, sustainability and financial viability.
– The partnership with Swedfund is an important milestone in the legacy of VCB. The subordinated Tier II capital will assist VCB in the growth of its strategy while maintaining our core vision of providing quality financial services, said Dr. Yogesh Pattni, CEO, Victoria Commercial Bank.
VCB is a Corporate and Private Bank incorporated in 1987. The bank is supported by a strong governance structure, robust asset quality, good capitalisation, strong liquidity and sound profitability. It has a large proportion of SME-clients. Swedfunds seven-year loan is directed to the banks SME-clients. Swedfund is the first DFI to invest in VCB.