This programme will tackle barriers that KCB, like other commercial banks, cannot overcome without the concessional funding from the GCF. These barriers encompass challenges of funding MSMEs and microfinance in the Kenyan financing market, limited funding for adaptation result areas for tailored for MSMEs, unsuitable credit terms for MSMEs, and an absence of gender-tailored solutions. The latter includes high credit costs, short tenures, significant equity components, and stringent credit rating requirements. Additionally, there are technological barriers and a lack of cohesive policymaking for MSMEs which will be addressed by the GCF grant via creating enabling environment through tools and standards revision, capacity building, and policymaking. Executing entities of the programme are represented by KCB for the CST Facility and on-lending deployment and CTCN for enabling environment agenda.

This is an ambitious initiative requiring a comprehensive approach, covering both upstream and downstream aspects of MSME funding in Kenya, as well as the incorporation of advanced technologies and assessment tools. Thus, KCB is seeking a USD 540,772 PPF grant from the GCF to undertake feasibility studies and prepare a detailed funding proposal for the GCF. This PPF funding will allow KCB to conduct analyses that will shape the design of a technically and financially robust funding proposal, ensuring it meets GCF requirements and supports the transformational and climate impact potential of the programme.

The PPF will be utilized for feasibility studies, stakeholder consultations, impact assessment, financial analysis, and the development of the full Funding Proposal, among other tasks:

• Programme feasibility study, baseline study, and a market study for CST credit products.
• Programme climate risks and Vulnerability assessment (CRVA)
• Climate impact monitoring and reporting tool for both adaptation and mitigation, including identification and monitoring of key performance indicators.
• Operations Manual for the CST Facility.
• Programme-level Environmental and Social Management System (ESMS).