KCB Bank Kenya has secured approval for a $96.9 million, about KShs. 12.5 billion, financing facility from the Green Climate Fund, in a move expected to directly benefit thousands of Micro, Small and Medium Enterprises, MSMEs, and smallholder farmers across the country.
The funding, structured under a blended finance model combining concessional loans, guarantees, and grants, will be channelled through the Climate Smart Technology programme. Its primary target is Kenya’s most vulnerable populations, particularly those in agriculture dependent communities and underserved business segments.
At the core of this initiative are small scale farmers and MSMEs, who form the backbone of Kenya’s economy but often face significant barriers to accessing affordable financing. These groups will benefit from tailored credit solutions, including flexible loan products and digital lending platforms designed to increase accessibility and scale outreach.
Farmers, especially those operating in arid and semi arid regions, are expected to gain from investments in climate resilient agriculture and water management technologies. With about 60 percent of the funds earmarked for climate adaptation, beneficiaries will be able to adopt modern irrigation systems, drought resistant practices, and improved water harvesting methods, helping to stabilise yields amid erratic weather patterns.
On the business side, MSMEs will access financing to adopt renewable energy solutions such as solar powered systems, energy efficient equipment, and clean cooking technologies. These interventions, which account for 40 percent of the allocation under mitigation efforts, are expected to lower operating costs, improve productivity, and reduce environmental impact.
Women and youth led enterprises are also a key focus, with the programme integrating gender inclusive financing to ensure broader participation in the green economy. Additionally, enterprises involved in waste management and circular economy solutions will receive support to scale sustainable practices.
According to Paul Russo, the initiative is designed to ensure inclusive climate transition. “By targeting MSMEs and smallholder farmers, we are ensuring that no one is left behind in the transition to a climate resilient future,” he said, noting that the goal is to equip communities with practical tools and financing to withstand climate shocks.
The programme comes at a critical time for Kenya, where over 80 percent of land is classified as arid or semi arid, and climate related shocks continue to erode livelihoods. Agriculture, which contributes 26 percent to GDP and employs the majority of the rural population, remains particularly exposed to changing weather patterns.
Catherine Koffman emphasised that the facility will help unlock private capital while reducing risks associated with climate investments. She noted that improved access to finance will enable small businesses and farmers to adopt technologies that enhance resilience, productivity, and long term economic stability.
The initiative aligns with national climate priorities, including the Kenya National Climate Change Action Plan III 2023 and updated climate commitments, reinforcing Kenya’s transition toward a low carbon and climate resilient economy.
For beneficiaries, the impact is expected to be tangible, improved farm yields, reduced energy costs, new income opportunities, and stronger resilience against climate shocks. For the broader economy, it signals a scaled push toward inclusive green growth, anchored on those most affected by climate change.
