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News 3 mins Read 30 Apr 2024 Brussels

EDFI MSME Platform guarantee programme backs DEG’s investment in women-led MSMEs in Kenya

EDFI Management Company (EDFI MC) is proud to support DEG – Deutsche Investitions- und Entwicklungsgesellschaft mbH – in an initiative for women-owned businesses in Kenya which provides a USD 25 million loan to the Co-operative Bank of Kenya (Co-op Bank) to establish a dedicated credit line for female-led micro, small, and medium-sized enterprises (MSMEs).

The project’s significance lies in EDFI MC’s role in mobilizing an EU guarantee from the European Fund for Sustainable Development Plus (EFSD+). This innovative approach marks the first instance where DEG has leveraged an EFSD+ guarantee, a financial instrument established under the EU’s Global Gateway Initiative. By managing this guarantee on behalf of the EFSD+ and through it’s EDFI MSME Platform programme, EDFI MC empowers DEG to extend its reach and support to deserving women entrepreneurs in developing economies.

“EDFI MC is delighted to back DEG in this impactful investment,” said Rodrigo Madrazo, Chief Executive Officer of EDFI MC. “Our role in managing the EFSD+ guarantee underscores our commitment to SDG objectives and fostering financial inclusion for women-led businesses.”

EU Guarantee Unlocks Critical Funding for Women Entrepreneurs

The credit line tackles the persistent challenge of limited access to capital faced by women-owned MSMEs in Kenya. This aligns perfectly with DEG’s longstanding commitment to supporting female-led businesses in developing countries, and with the EDFI MSME Platform programme.

Collaboration Drives Progress on Sustainable Development Goals

The backing of this partnership between DEG, and Co-op Bank extends beyond financial empowerment. The initiative contributes to achieving the UN Sustainable Development Goals (SDGs) for Decent Work and Economic Growth (SDG 8) and Gender Equality (SDG 5). It also furthers the EU’s Global Gateway Initiative, promoting international cooperation for sustainable development.

By supporting DEG’s use of the EU guarantee, EDFI MC demonstrates its commitment to innovative financial solutions that empower women entrepreneurs and propel inclusive economic growth. This collaboration serves as a powerful example of how international partnerships can drive positive change.

About EDFI Management Company:

EDFI Management Company (EDFI MC) is a multilaterally owned impact asset manager which delivers innovative development finance solutions that enable European DFIs, development banks and private sector investors to increase the scale and impact of their work. The company focuses on business models, technologies and geographies where other investors have not been able to operate at the desired scale given their resources and investment criteria.

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The EDFI MSME Platform, managed by EDFI Management Company, is a joint EDFI guarantee facility under the EU’s EFSD+ and open to EDFI-member pillar-assessed institutions. It is a risk-sharing mechanism to foster financing from European DFIs to local financial institutions. The final goal is to address financial constraints faced by MSMEs, supporting jobs, economic opportunities, skills and entrepreneurship.

About DEG:

For more than 60 years, DEG has been financing and advising private enterprises operating in developing and emerging-market countries. With a portfolio of around EUR 10.3 billion we’re one of the largest private-sector development financiers. As an impact and climate investor we accompany companies that are addressing transformation and aiming to seize their opportunities. Our customers not only receive financing and advisory solutions tailored to their needs: they can build on our market knowledge, our impact and climate expertise and our international network. In this way, DEG, a subsidiary of KfW, contributes to creating more skilled jobs and local income and to improving value creation on the ground in line with the SDGs.

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