USAID’s Kenya Investment Mechanism (KIM) has officially hit its project target of $520 million in capital mobilized – with 11 months left to deliver more impact!
By mid September 2022, KIM’s partner financial institutions (FIs) and business advisory service providers (BASPs) had mobilized over $300 million and $192 million, respectively. This capital went to more than 400 enterprises within the project’s target sectors. Through its partnership with the Kenya Pension Funds Investment Consortium (KEPFIC), institutional investors in Kenya have invested close to $30 million into infrastructure and other sectors.
Drivers of Success
“KIM reaching its life of project target for capital mobilization ahead of time reflects the demand for credit, particularly during the COVID-19 pandemic,” says Roger Bird, KIM’s Chief of Party. “It is also the result of the hard work of our network of BASPs and FIs, and the dedication of the KIM team to make the market linkages and help its partners to overcome market challenges.”
Since 2018, KIM has functioned as an investment platform that unlocks private finance and investment in the agriculture, clean energy, health, water, and trade sectors, as well as for women-owned businesses. To do so, KIM has mobilized significant private capital by strengthening collaboration between stakeholders in the financial ecosystem to address market failures that hinder large-scale investment in the target 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.
“Part of our strategy was to select strong partners with proven track records. Our partner FIs include Tier 1 commercial banks which have extensive branch networks across the region, and strong financial muscle,” says Lukas Barake, KIM’s Deputy Chief of Party. “Similarly, our BASP network consists of competent advisors from across Kenya and the East Africa region with the capacity to support large, complex transactions.”
KIM’s success is also attributable to its deliberate co-creation and partnership efforts. This includes leveraging strategic partnerships with local partner intermediaries such as large corporates, innovative lead firms, FIs, governments, and other development partners. “We have been very intentional about implementing activities that are informed by our interactions with the market. Regularly engaging our different stakeholders has, in turn, resulted in an organic process of co-creation and co-financing of activities that the market wants and needs,” notes Roger.
For the millions of smallholder farmers and hundreds of SMEs across the region who have been able to access credit – some for the first time – due to KIM’s efforts, it is evident that KIM’s activities have resulted in a transformed financial ecosystem. “Our legacy will be the creation of a self-sustaining market system that supports the enhanced mobilization of finance and investment for smallholders and SMEs and will firmly place East African economies on the path to self-reliance,” concludes Roger.
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