Swedfund has announced a second investment of $7.5 million ( KSh 967.5 million)in Kenya’s Victoria Commercial Bank (VCB) PLC.
Swedfund is Sweden’s development finance institution, dedicated to poverty reduction through sustainable investments in developing countries.
This loan follows a previous investment of $5 million (KSh 645 million) in 2018 and aims to further bolster the bank’s capacity to finance small and medium-sized enterprises (SMEs) in Kenya.
“Small and medium-sized enterprises are the backbone of economies, employment and innovation. With this second loan, we want to deepen our impact and enhance their capacity to support even more businesses. This investment is in line with Swedfund’s mission to reduce poverty through sustainable investments,” said Jane Niedra, Investment Director for Financial Inclusion at Swedfund.
The investment addresses the significant challenge SMEs face in developing countries regarding access to long-term finance.
The funds will enable SMEs in sectors like manufacturing, trade, and agriculture to access crucial capital for development and expansion.
“We are proud to partner with Swedfund, a respected institution supported by the Swedish government. Through this collaboration, we can grow while continuing to provide financial services with integrity. Beyond financing, Swedfund brings valuable technical expertise, enabling us to better support our SME clients and contribute to sustainable economic development. We highly value this partnership and our shared focus on growth and long-term sustainability,” said Dr. Yogesh Pattni, Chief Executive Officer (CEO) of Victoria Commercial Bank PLC.
VCB PLC, a Kenya-based bank focused on SMEs, operates with a robust governance structure and financial stability.
The bank’s strategy emphasizes personalized customer relationships and digital development to broaden access to financial services for underserved businesses.
Swedfund’s initial $5 million investment in 2018 marked them as the first development finance institution to invest in VCB PLC.
With Swedfund’s support, the bank has since developed an environmental and social management system (ESMS) aligning with the International Finance Corporation’s (IFC) Perfomance Standards and the International Labour Organization’s (ILO) Core Conventions.
This system includes a sustainability policy, ESG risk assessment, and staff training.
Furthermore, VCB PLC has implemented the Swedfund-supported Women4Growth program, providing leadership and inclusion training.
The bank qualifies for the 2X Challenge, with over 50% female employees and more than 30% female senior managers.
Swedfund plays a vital role in the implementation of the 2030 Agenda and the Paris Agreement on climate.
The initiative utilizes sustainable private sector investments and technical feasibility studies through the Project Accelerator for the public sector.
Their investments contribute to decent job creation and increased access to essential products and services.
As a long-term investor, Swedfund is additional and catalytic, mobilizing private capital. A state-owned company managed by the Ministry of Finance, Swedfund is financed through portfolio reflows and annual capital injections from the Swedish Ministry for Foreign Affairs.