By Deepening Financial Inclusion And Sustainability Within Kenya’s Financial Services Sector
The Kenya Bankers Association (KBA), in collaboration with IFC and WWF Kenya have today launched the revamped Sustainable Finance Guiding Principles and the Landscape of Sustainable Finance in Kenya’s Banking Industry Report as part of ongoing efforts to deepen financial inclusion and sustainability within Kenya’s financial services sector.
“By integrating sustainability into our lending and investment decisions, we can help mitigate climate risks, support green projects, and grow our economies while safeguarding the future of our planet.” says Betty Korir, Kenya Bankers Association Vice Chairperson
Developed with IFC’s support, the revamped Sustainable Finance Guiding Principles provide a robust framework for banks to integrate Environmental, Social, and Governance (ESG) considerations into their operations.
Deepening Financial Inclusion And Sustainability Within Kenya’s Financial Services Sector
‘’Application of the SFI principles is important for Kenyan banks as it will promote financing for renewable energy, energy efficiency, sustainable agriculture, and other eco-friendly projects’’ noted Mary Potter Peschka, IFC Regional Director.
Alignment with global standards fosters responsible lending, sustainable investments, and innovative financial solutions that address Kenya’s socio-economic and environmental challenges.
The report indicates that gross loans across 11 key sectors grew by 23 percent since 2020, reaching Sh3.6 trillion in 2022, with MSMEs receiving Sh783.3 billion.
However, the report cites challenges such as high costs for sustainability-linked bonds, inconsistent sustainability reporting, and limited data standardization persist.
‘’Kenya is endowed with rich natural resources, a dynamic entrepreneurial spirit, and a robust financial sector that provides a unique platform to champion sustainability. However, with these opportunities come significant responsibilities to adopt an integrated approach that aligns economic activities with the sustainable development agenda” added Mohamed Awer, WWF-Kenya Chief Executive Officer
The report identifies opportunities for further investment in green growth sectors, including agriculture, energy, water, manufacturing, and real estate.
“The Sustainable Finance Initiative has enabled over 50,000 bank employees to make lending decisions that benefit the environment, society, and economy. With the revamped guiding principles, the banking industry is better equipped to adopt best practices in governance and risk management, further driving innovation and financial inclusion.” says Raimond Molenje, KBA Ag. CEO
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