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KCB Screens KShs268B in Loans to Reduce Environmental and Social Risk

KCb Group screened Kshs268 billion in loans last year for social and environmental risks as part of its tougher stance in managing climate change and commitment to green finance.

the  bank  said  it  has  now  fully integrated its environmental and social management system (esms) into the lending process— for facil- ities to corporate and small and medium-sized enterprises (sme) clients—further aligning key busi- ness operations with the KCb’s sustainability Agenda.

A total of 42 social environmen- tal assessments were undertaken on 100  million  facilities  worth Kshs. 268   billion   in   2016.  this   consti- tutes at least 70 per cent of the bank’s loan book which stood at Kshs. 385.7 billion. In 2017, this process will also be implemented in micro-lending, as the bank seeks to further deepen its  contribution towards reducing the impact of cli- mate change.

screening is done to avoid and manage loans with potential social and environmental risks by con- ducting social and environmental due diligence prior to loan disburse- ment.  this   means   that   eventually, businesses with effective strategies towards reducing environmental impact in their operations would be better positioned to get loans in the future, said KCb Group CeO and mD Joshua Oigara.

“We are committed to being a sustainability leader by contribut- ing to the green economy which is new to the industry. We have made great strides in undertaking social and environmental  assessments on our portfolios and seek to fur- ther enhance these procedures as we engage more with stakeholders across the region and globally” said Oigara. the   details   are   contained   in

KCb’s 2014-2016 sustainability report published this week which details what the bank is doing beyond the pursuit of profits to reduce the impact on the environ- ment and the planet while uplifting communities, as part of its core business.

KCb plans to partner with other industry players to raise Green bonds—loans issued to banks to fund projects that have positive environmental benefits especially in green investments such as renewable energy, water infrastructure and sustainable agriculture.

the bank is also looking at rais- ing funds from the Global Climate Fund to support some of the green financing projects such as mifugo in mali, agribusiness and Inua Jamii.

“It is our belief that these efforts, combined with continuous improve- ment towards our goals, will raise our sustainability performance and help all of our stakeholders under- stand our intense desire for con- tinued progress. We recognize the importance of our work for the future of our business and the communities

we serve and we are ready to deliver on our promise to our stakeholders” he said.

In   April,   the   Kenya bankers Association (KbA) and the Nairobi securities exchange (Nse) launched the Kenya Green bonds programme

to fight climate change. KCb said it is keen on maintaining operational efficiencies on all aspects and all the way to the branch level in ensuring that it becomes a carbon neutral bank.

Among the raft of measures that the bank has adopted and is pushing is introduction of video-conferencing and e-boards for board meetings; adoption of the KCb Green Agenda initiative across the Group; invest- ing in low carbon emitting vehicles and leasing as opposed to buying and outsourcing transport and use of electronic document management system and adoption of paperless transactions (mobile and Internet banking).

“We believe that business is no longer just about making profits but about transforming the lives of communities in markets where we operate. It is our firm conviction that sustainability must go hand in hand with increasing shareholder value and I believe that we have found the right balance,” said the group CeO. “We don’t operate in a vacuum but in an environment where we have to ensure that we are a good corporate citizen.”

“Our environmental conserva- tion efforts are aimed at protecting our planet and natural resources. the  rollout  of  Internet  and  mobile banking has reduced our consump- tion of paper, consequently contrib- uting to environmental conservation by  saving  trees. the  relationship  is not obvious but it is direct,” stat- ed Oigara. “We have also installed energy efficient lighting with motion sensors and LeD lighting in some of our branches as part of our energy saving agenda,” Oigara added.

KCb’s sustainability Agenda is anchored on further helping drive the sustainable Development Goals which are meant to eradicate an array of issues that included reducing poverty, hunger, disease, gender inequality, and access to water and sanitation.

the bank is also pushing employ- ment creation through the 2jiajiri program which was launched in 2015 as part of the sustainability agenda.

In 2016, 2,234 students were enrolled in the pilot phase of the pro- gram in 114 vocational centers in 20 counties. Additionally, 600,000 new accounts were opened for the youth on bankika.

In the medium term, the Group is also working to improve transpar- ency, and adopting zero-tolerance to unethical behaviour. Also on the cards is efficient energy management and pursuit of green technologies.

“Our sustainability initiatives have been embedded into our busi- ness as part of our long term strategic vision  and  we  are  measuring  our progress to ensure that we are on track,” said the group CeO.

KCb Group plc is east Africa’s largest commercial bank that was established in 1896 in Kenya.

Over the years, the bank has grown and spread its wings into tanzania,   south    sudan,   Uganda, rwanda, burundi and ethiopia. today   KCb   bank   Group   has   the largest branch network in the region of over 250 branches, 962 Atms and 13,562 agents offering banking ser- vices on a 24/7 basis in east Africa.

this  is  complemented  by  mobile banking and internet banking services with a 24hour contact center services for our customers to get in touch with the bank.

the   bank   has   a   wide   network of correspondent relationships total- ing over 200 banks across the globe and our customers are assured of a seamless facilitation of their interna- tional trade requirements wherever they are.