Just a few months after breaking its original target of $400 million in capital mobilized, Kenya Investment Mechanism (KIM) has passed the $500 million mark with more than a year still left in the project’s lifetime. “We have now mobilized $505 million for SMEs and smallholders in Kenya and East Africa,” says Roger Bird, Chief of Party. “Our financial institutions (FIs) have disbursed over $294 million to our target sectors, while business advisory service providers (BASPs) have supported mobilization of $181 million. Through our partnership with the Kenya Pension Funds Investment Consortium, KEPFIC, institutional investors in Kenya have invested close to $30 million into infrastructure and other sectors.”
“Our success is largely due to the deliberate effort to select strong partners with proven track records,” explains Lukas Barake, KIM’s Deputy Chief of Party. “Our FI network includes KCB, Equity Bank, and Co-operative Bank, all tier 1 commercial banks with extensive branch networks and strong financial muscle. Similarly, our BASPs network is comprised of seasoned advisors who can support large transactions and have a footprint in our target countries.”
KIM mobilizes capital by addressing market failures that have discouraged investors from financing agriculture and other sectors. Through smart incentives and demand-driven technical support, KIM has facilitated private finance and investment for SMEs and smallholders through a robust network of 20 FIs and 40 BASPs.
KIM’s success as an investment platform that mobilizes substantial capital from the private sector can be attributed to its deliberate co-creation and partnership efforts. “All our activities are the result of our interactions with the market. Regularly engaging our stakeholders in networking and joint work planning sessions, program reviews, and pause-and-reflect sessions has resulted in an organic process of co-creation and co-financing of activities that the market wants and needs,” notes Roger.
KIM’s current achievements against its target of mobilizing $520 million for East African enterprises are proof that the project’s legacy is set to be a transformed market that supports the mobilization of finance and investment for thousands of smallholder farmers and SMEs.
Roger says that KIM’s real success will be the transformation of the financial ecosystem, resulting in enhanced access to credit for millions of smallholder farmers and SMEs across the region. “Ultimately, our objective is to create a self-sustaining market system that will firmly place East African economies on the path to self-reliance,” he says.