Equity Group has acquired a US$ 165 million (sh.18.6 billion) loan from the International Finance Corporation (IFC) 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 from IFC, which is a member of the World Bank Group, is one of the single-largest credit facilities to a Kenyan lender.
Besides shoring up the bank’s capital base, the new loan will also be lent to customers fitting IFC’s impact investing criteria.
Equity Group has acquired a US$ 165 million (sh.18.6 billion) loan from the International Finance Corporation (IFC) 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 from IFC, which is a member of the World Bank Group, is one of the single-largest credit facilities to a Kenyan lender.
Besides shoring up the bank’s capital base, the new loan will also be lent to customers fitting IFC’s impact investing criteria.
The facility will partly support Equity’s lending towards Climate Smart Projects and the local SME sector which was hard hit by the Covid-19 containment measures.
The loan is part of IFC’s global $8 billion fast-track COVID-19 facility, announced in March and designed to help businesses maintain operations and jobs during—and after—the COVID-19 crisis.
Dr. James Mwangi, Equity Group Managing Director, and CEO said, “IFC’s loan, part of our business continuity management plan, will help Equity Bank extend much-needed support to our clients, particularly to SMEs in sectors hit hard by COVID-19. We have purposed to support and walk with them so that they can survive during this crisis, recover, and thrive after it.”
Manuel Moses, IFC Country Manager for Kenya, said, “IFC’s longstanding partnership with Equity Bank underscores our commitment to Kenya’s financial sector and wider economy, especially during these difficult economic times. Keeping businesses solvent and protecting jobs are essential parts of IFC’s response to the unprecedented challenges of COVID-19.”
According to the deal, IFC will directly provide US$ 50 million (sh.5.6 billion), with the remaining US$ 115 million (sh.13 billion) coming from partners.
IFC is also set to become the bank’s second-largest shareholder after signing an agreement to purchase insurance firm Britam’s stake in the lender. The institutional investor will buy 253.1 million shares of the bank from Britam at sh.55 each based on negotiations with the insurer.
IFC will acquire 164.5 million shares of the lender directly and another 88.5 million shares through its IFC Financial Institutions Growth Fund LP.
