Stanbic Bank Bets on Startups with $100 Million Funding Drive

Stanbic Bank Kenya, the sixth largest lender in the country by assets, is preparing to raise $100 million (KES12.9 billion) to finance startups across East Africa.

The bank aims to channel the funds through its Catalytic Fund, focusing on supporting startups and small and medium enterprises (SMEs) in key sectors such as agritech, the creative economy, healthtech, and manufacturing. These sectors often struggle to secure capital due to perceived high risks and long growth timelines.

“We are in the market for $100 million (KES12.9 billion),” Stanbic Bank CEO Joshua Oigara told the media. “We have learnt that if you keep just focusing on the businesses that are ready now, you are leaving 80% of the clients in the industry. We have to continue expanding the continuum by bringing such in.”

Stanbic introduced the Catalytic Fund in 2020 as part of its social impact strategy, offering patient capital that behaves more like grants than traditional loans. The fund is designed to de-risk early-stage ventures and provide the runway they need to grow.

By the end of December 2024, the bank had disbursed KES182.4 million ($1.4 million) through the fund, including KES63 million ($487,616) in 2024 alone.

The planned capital raise would significantly scale Stanbic’s commitment and could test whether commercial banks can sustainably support startups, a space long avoided by traditional lenders.

“Energy projects tend to have the longest lead time from what we have seen, even 10 years. We’ve aligned with the biggest areas of the economy, like agriculture, because the model is similar, but energy projects tend to have the longest lead time,” Oigara said.

Stanbic’s approach contrasts with most Kenyan banks, which remain cautious about entering the startup ecosystem, typically dominated by venture capital firms and development finance institutions (DFIs).