NAIROBI, Kenya, Jan 4 – The International Finance Corporation (IFC) has loaned Equity Group Sh18.6 billion to help it increase working capital and trade-related lending to its small and medium-sized enterprise (SME) clients in Kenya, especially those facing COVID-19 related challenges.
The loan is one of the single-largest credit facilities to a Kenyan lender, and will be used to
lend to customers fitting IFC’s impact investing criteria which includes women owned businesses and climate-related ventures such as renewable energy projects.
Hundreds of Kenyan SMEs in the manufacturing, health, trade, transport, and consumer goods sectors, will be supported as part of IFC’s global $8 billion fast-track COVID-19 facility, announced in March 2021 and designed to help businesses maintain operations and jobs during and after the COVID-19.
“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 purposed to support and walk with them so that they can survive during this period, recover, and thrive after it,” said Dr James Mwangi, Equity Group Managing Director, and CEO.
According to the deal, IFC will directly provide Sh5.6 billion, with the remaining S13 billion coming from partners.
“IFC’s longstanding partnership with Equity Bank underscores our commitment to Kenya’s financial sector and the wider economy, especially during these difficult economic times. Keeping businesses solvent and protecting jobs are essential parts of IFC’s response to the unprecedented challenges of COVID-19,” said Manuel Moses, IFC Country Manager for Kenya.
The move comes as the global lender is set to acquire 6.7 percent stake of the Bank following the agreement to buy Britam Stake for Sh13.9 billion.
IFC will buy 253.1 million shares of the bank from Britam at Shh55 each based on negotiations with the insurer and will acquire 164.5 million shares of the lender directly and another 88.5 million shares through its IFC Financial Institutions Growth Fund LP.