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KCV: Elevating small scale enterprises through impact investing

  • By Vivian Kwame
  • March 29, 2021

Small scale enterprises are one of the key drivers of economic growth vital to most economies. They contribute to the Gross Domestic Product (GDP), create employment opportunities, aid in industrial development, help promote sustainability and satisfy local demand for services just to mention a few.

Unfortunately, most startups and early stage enterprises in Kenya find it hard to access flexible financing, suitable to the cash-flow nature of their businesses.

The funding gap has particularly been more salient for clean-tech projects; given that it is a relatively new field with lenders lacking a complete picture of its viability. However, sustainability-inclined organisations such as Kenya Climate Ventures (KCV) are taking a bold step into filling the gap by providing funding and advisory gaps for climate friendly enterprises.

“Kenya Climate Ventures is an impact investment company whose aim is providing financial and technical support to SMEs working to create transformative change in the climate-related sectors,” says Victor Ndiege, the CEO of KCV.

To add on this, the organisation also provides seed capital to enterprises, offers technical and business development advisory services to equip businesses with market skills and increase their chances of succeeding.

By investing in SMEs directly, investors such as KCV, can ensure more rational and sustainable value creation in their asset allocation, with a promise to achieve volatility and more stable returns in the long term. SME impact investing also creates an environment for SMEs to thrive and grow by offering business development support and technical support.

“By offering business development support and technical assistance, KCV ensures the right structures have been installed and recommended improvements made prior to and during the investment management period,” says Victor.

Currently, KCV has invested in 17 clean-tech SMEs with the support of their funding partners. The company also relies on its sister company Kenya Climate Innovation Center (KCIC) as an incubating organisation to incubate potential enterprises. The incubation process usually takes place when enterprises are still in the pre-revenue stage. This helps them build a solid business model before KCV steps in with funding.

Since inception, KCV has contributed to the creation and sustenance of over 300 jobs through the funded enterprises; 3,000 farming households have also had access to clean cooking solutions courtesy of their investee- Sistema Bio, a biogas provider.

KCV is also keen on supporting and uplifting women-led enterprises; 30% of KCV clients are led by women.

As for their future plans, KCV plans on scaling up investments, increasing footprint across their country and investing in the new sectors; water and commercial forestry.