Kenyan businesses impacted by Covid-19 to receive funding

Vital Capital has collaborated with Usaid’s Kenya Investment (Kim) Mechanism to provide financing to Kenyan businesses affected by the Covid-19 pandemic. 

The collaboration between Kim and Vital Capital aims to provide $400-million in investments for key sectors of Kenya’s economy along with regional trade and investment opportunities.

The collaboration aims to provide $400-million in investment for Kenya’s key sectors

While focusing on agribusinesses and a number of other sectors, KIM will place SME’s into competitive and growth-oriented value chains to foster broad-based, sustained, and inclusive economic growth in Kenya.

Managed by Palladium, an international impact advisory and management firm, Kim is a five-year program funded by the US Agency for International Development that has launched a five-year program to unlock significant financing to businesses in targeted sectors that have been adversely affected by the Covid-19 pandemic.

Nimrod Gerber, Managing Partner, Vital Capital comments on how the collaboration will work to assist Kenyan businesses. 

“We are excited to launch this major collaboration to support Kenyan agribusinesses in what is an incredibly challenging economic environment.KIM’s goals are closely aligned with our own and we have a shared vision for the economic development of the agricultural sector in Kenya. We believe this collaboration has the potential to affect real change and support smallholder farmers to survive the worst ravages of the Covid-related economic crisis.”

In Kenya, COVID-19 threatens livelihoods and food security in a nation that is already grappling with the worst locust infestation in 70 years and trying to recover from extensive flooding. 

According to a recent survey by the World Bank, around 27% of households are suffering from food shortages, while in May, the Central Bank of Kenya indicated that roughly 75% of the country’s SMEs could face collapse without funding assistance from banks and equity partners. 

The collaboration will result in identifying potential opportunities in Kims pipeline that corresponds to Vital Capital’s investment mandate. In addition, the collaboration will leverage off Kim’s network of transaction advisors to increase efficiency in closing transactions that are under the Vital Capital’s investment committee. 

Vital Capital and KIM are seeking to identify and execute at least five completed transactions, providing at least $5-million in financing, to alleviate the strain of Covid-19 on impactful Kenyan businesses, sustaining 500 jobs.

The collaboration follows Vital’s launch in April of the Vital Impact Relief Facility, a $10-million emergency loan facility to offer critical funding to promising African businesses to help them overcome the economic consequences of the Covid-19 pandemic. 

Roger Bird, Kenya Investment Mechanism Chief of Party explains that the partnership will promote economic growth in Kenya. 

“Vital Capital was quick to recognize and fast to respond to the economic consequences of Covid-19 in Kenya, and we are pleased to collaborate with them. As a long-standing investor in the region and, in addition to bringing new funding and a pipeline of investment opportunities in our target sectors, the Vital team brings a huge amount of experience and expertise of creating a positive sustainable impact that will be invaluable as we look to create enduring economic growth in the country.”

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Featured image: Nimrod Gerber, Managing Partner, Vital Capital (Supplied)