KCB Bank Kenya Limited (KCB), in collaboration with the Climate Technology Centre & Network (CTCN), has developed the MSMEs’ Climate Sound Technologies in Kenya programme. This programme aspires to enable MSMEs, contributing 40% to the Kenyan GDP, to adopt Climate Sound Technologies (CST) to support the NDC objectives. The implementation will involve KCB's on-lending of blended capital across its national branch network. The designated facility will offer affordable credit products tailored explicitly for MSMEs. Of the programme's resources, 60% will be allocated to adaptation initiatives, including climate-resilient agriculture and water management technologies. In contrast, 40% will focus on mitigation efforts such as off-grid renewable energy, waste management, energy efficiency for manufacturers, clean cooking, and clean appliances. The designated facility will strive to empower women. Microbusinesses, which confront the most significant barriers to funding access, will benefit from 80% of the concessional credits for CST adoption.

This programme will tackle barriers that KCB, like other commercial banks, cannot overcome without the concessional funding from the GCF. These barriers encompass challenges of funding MSMEs and microfinance in the Kenyan financing market, limited funding for adaptation result areas for tailored for MSMEs, unsuitable credit terms for MSMEs, and an absence of gender-tailored solutions. The latter includes high credit costs, short tenures, significant equity components, and stringent credit rating requirements. Additionally, there are technological barriers and a lack of cohesive policymaking for MSMEs which will be addressed by the GCF grant via creating enabling environment through tools and standards revision, capacity building, and policymaking. Executing entities of the programme are represented by KCB for the CST Facility and on-lending deployment and CTCN for enabling environment agenda.

This is an ambitious initiative requiring a comprehensive approach, covering both upstream and downstream aspects of MSME funding in Kenya, as well as the incorporation of advanced technologies and assessment tools. Thus, KCB is seeking a USD 363,572.00 PPF grant from the GCF which will be supported by the KCB contribution in-kind to undertake feasibility studies and prepare a detailed funding proposal for the GCF. This PPF funding will allow KCB to conduct analyses that will shape the design of a technically and financially robust funding proposal, ensuring it meets GCF requirements and supports the transformational and climate impact potential of the programme.