Banks have surpassed their annual lending target to Micro, Small and Medium Enterprises (MSMEs) by 2 per cent to issue Ksh153 billion up from their Ksh150 billion ($1.2 billion) target.

Speaking during the launch of the Nature Positive Financing Assessment Report, Kenya Bankers Association (KBA) Chief Executive Officer Raimond Molenje reaffirmed banks’ commitment to financing nature-related enterprises to create a resilient green economy.

“From a macro-level perspective, we are doing well in the economy. We promised to support MSMEs with Ksh50 billion ($386.4 million) every year for the next year and I am happy to report that we have surpassed this target to issue out Ksh153 billion, which I hope will be sustained in the remaining months of the year,” Molenje said.

The report seeks to quantify nature-related investment opportunities available in Kenya and advance the industry’s commitment to sustainable financing models. Some of the innovative instruments highlighted by the study include green bonds, blended finance and de-risking mechanisms.

The report that was commissioned by KBA, World Wide Fund for Nature-Kenya (WWF-Kenya) and German Corporation for International Cooperation (GIZ), reveals that Kenya’s manufacturing, water resource management, environmental services and agriculture sectors will hold a combined nature-related investment and financing opportunities valued at Ksh19.4 trillion in the next 5-10 years.

According to the report, the four sectors also represent the most viable opportunities for nature-positive financing.

Molenje said that the findings will provide banks with options to contribute to Kenya’s sustainable economic development, curb nature loss, and strengthen resilience to climate change.

In addition, he said that the findings will help banks align their policies with the green economy strategy, national biodiversity strategies and action plans (NBSAPS) and other climate change policies.

“As we configure our survival and the survival of our day-to-day business operations, we aim to integrate the existing opportunities in the economy with nature-financing to sustain this growth as we aim to attain the global target of full biodiversity recovery by the year 2050,” Molenje said.

The launch of the report also coincided with KBA unveiling of the Centre for Sustainable Finance and Enterprise Development (CSFED). The centre is expected to rally banks to develop interventions that advance sustainable value for society and the environment.

It will also serve as a hub for supporting MSME transformation through capacity building and enhance their access to finance.

Molenje, said the Centre would be instrumental in greening the financial system while bolstering enterprise development in Kenya.

“We are committed to supporting the industry in advancing the sustainable finance agenda in the country while also promoting financial inclusion for underserved segments and enhancing MSMEs’ access to affordable finance,” he said.

WWF-Kenya CEO Mohamed Awer noted that Kenya’s prosperity is deeply tied to nature-based sectors, including agriculture, tourism, forestry and fisheries, which he said contribute approximately 42 per cent of the country’s gross domestic product.

Awer underscored the importance of close collaboration between the financial sector and players in the nature-based sectors to accelerate the growth and scaling of Kenya’s nature-financing market.

“This report showcases the intersectional role the financial sector plays in driving a nature-positive economy and how we can close the biodiversity finance gap. Together, we can continue to chart a transformative pathway to economic resilience, climate stability and inclusive growth for people and the planet,” he said.

• A Tell Media / KNA report / By Wangari Mwangi