Component 1 strengthens PFI capacity for rural outreach and builds MSME and smallholder investment capacity and financial literacy.
Through two fully inter-linked sub-components, Component 1 will (i) strengthen Participating Financial Institution (PFI) capacities for innovation, rural outreach and green finance services in Kenya, and (ii) build MSME and smallholder sustainable investment capacities and financial literacy skills particularly tailored to reach women, youth and marginalised groups.
Both aspects of the TSIS – supply and demand side – will be embedded into the rural growth strategies of PFIs to foster sustainability and scalability and support the effective use of the resources provided through the project’s Investment Instruments component. This component will be coordinated by co-financing partner organisations.
Sub-component 1.1: PFI capacity building for rural outreach and innovation
Under this sub-component, the capacity of five participating commercial banks, six MFBs and 30 DT-SACCOs will be improved to provide rural and agriculture financial services, including products tailored to youth and women. In addition, the capacity of all 41 PFIs will be built to implement and monitor green investment portfolios while operationalising and strengthening the environmental and social management systems of the 41 PFIs.
Sub-component 1.2: Business development services for agribusinesses and smallholders
Under this sub-component, 1,500 small and micro enterprises will receive business development services (BDS) to enable them to submit bankable business plans. In addition, 50,000 male and female smallholder producers will receive financial literacy training, including for the preparation of simple business plans appropriate for SACCO/MFB loan applications. The BDS is a key tool for social inclusion targeting of RK-FINFA: a minimum of 50 per cent women and 30 per cent youth are included among all BDS clients.