The USAID Kuza project, which operates under the Feed the Future Kenya Livestock Market Systems Activity, works within the 10 arid and semi-arid counties of the
Key to further supporting the region's development is tailored support to the financial sector. The previously mentioned divides in financial access play out in the form of unsuitable financial products and a lack of access to an investable pipeline of businesses. As well, regional financial institutions face liquidity constraints that severely hamper their ability to offer products at an attractive market rate.
To address these issues, USAID Kuza established a tailored investment mechanism called the Impact for
USAID Kuza developed an impact strategy and metrics to guide the Fund in identifying, evaluating, monitoring, and reporting on the clients of financial institutions. It will also support the institutions in their selection and monitoring of micro, small- and medium-sized enterprise end clients. The strategy defines the positive impact screens, such as gender and youth inclusivity and market systems approaches, and the negative impact screens.
USAID Kuza believes that the Fund structure will benefit both the supply and demand sides of finance in the 10 counties. On the supply side, the Fund will directly support financial institutions in expanding their ability and capacity to serve regional businesses, linking up to provide much-needed technical assistance. The on-lending funds will incentivize the institution to broaden their prospective borrowers. On the supply side, the Fund will support local businesses' need for more suitable financing. By helping financial institutions improve their offerings or enter into a new market, the Fund will serve as a proof-of-concept encouraging financial institutions to distribute more capital to
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