The International Finance Corporation, a member of the World Bank has lent Ksh18.6 billion to the Kenyan banking subsidiary of Equity Group.
The loan from IFC will support hundreds of Kenyan businesses in the manufacturing, health, trade, transport, and consumer goods sectors.
Equity Group Managing Director and Chief Executive James Mwangi said the partnership with the global financier will help increase working capital and trade-related lending to its small and medium-sized enterprise (SME) clients in Kenya to cushion them from the ravages of COVID-19 pandemic.
“IFC’s loan, part of our business continuity management plan, will help Equity Bank extend much-needed support to our clients, particularly to SMEs in sectors hit hard by COVID-19. We have proposed to support and walk with them so that they can survive during this crisis, recover, and thrive after it,” said Dr. Mwangi.
According to the deal, IFC will directly provide Ks. 5.6 billion, with the remaining Ksh.13 billion coming from partners.
IFC Country Manager for Kenya Manuel Moses said the deal will keep the businesses solvent and protect jobs during these unprecedented challenges posed by the virus.
Manuel disclosed to acquire 164.5 million shares of the lender directly and another 88.5 million shares through its IFC Financial Institutions Growth Fund LP.
Besides shoring up the bank’s capital base, the new loan will also be lent to customers fitting IFC’s impact investing criteria.
The International Financial Institution encourages the banks it funds to lend to women-owned enterprises and climate-related ventures such as renewable energy projects.
The loan from IFC, which is a member of the World Bank Group, is one of the single-largest credit facilities to a Kenyan lender.