Why Kenya’s informal sector misses out on climate finance
NAIROBI, Kenya, Feb 13 - Kenya’s banking sector is increasingly talking the language of climate finance. From polished sustainability reports to Kenya breaking news | Kenya news today |..
✨ Key Highlights
While Kenya's banking sector is increasingly investing in climate finance, with institutions like KCB Group, Standard Chartered Kenya, and Equity Bank reporting significant green loan growth, the vast majority of these funds are inaccessible to Micro, Small and Medium Enterprises (MSMEs) and Jua Kali artisans. This disparity leaves a critical gap in supporting the backbone of Kenya's economy in climate mitigation and adaptation efforts.
- Only about 3% of SMEs in Kenya currently qualify for green financing products.
- KCB Group disbursed Sh53.2 billion in green loans in 2024, representing about 21.32% of its total loan book.
- The World Bank committed approximately Sh5.55 billion to a green investment fund for Kenyan SMEs in early 2026, channeled through the Kenya Development Corporation’s Green Investment Fund.
- The Central Bank of Kenya (CBK) launched the Kenya Green Finance Taxonomy (KGFT) and a Climate Risk Disclosure Framework in April 2025 to standardize green investments.
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Scrutiny on Kenya's Green Finance as Unga Farm Care Turns to Biomass - February 2026
While Kenya's banking sector is increasing investment in climate finance, with institutions like KCB Group, Standard Chartered Kenya, and Equity Bank reporting growth in green loans, these funds are largely inaccessible to Micro, Small and Medium Enterprises (MSMEs). Critics argue that the green finance boom is primarily benefiting large corporations and commercially viable infrastructure projects, rather than addressing the climate vulnerabilities of exposed communities. It is argued that capital is concentrating where it is easiest to invest, leaving socially urgent challenges underfunded. Meanwhile, in a corporate move to reduce energy costs, Unga Farm Care EA has installed a new biomass boiler at its manufacturing plant in Nairobi, in collaboration with Lean Energy Solutions, to lessen its dependence on diesel.
