IFC Bets Big On Kenyan Banks.

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The International Finance Corporation (IFC) is channelling billions of shillings into Kenyan small businesses and women-owned enterprises through strategic loan partnerships with banks; plugging a gap in the local credit market that remains wary of risky SMEs.

The international financier’s exposure to local tier-one lenders through debt and equity totalled Sh105.8 billion at the end of 2021. Comprising mainly of medium-term credit facilities that are also backed by fellow development finance institutions.

The IFC has recently committed $2 billion towards financing MSMEs in Africa; seeing them as the fundamental for delivery of essential services, job creation, and reducing poverty. Equity Group accounts for the largest share of these loans at Sh52.8 billion; comprising Sh38.9 billion in loans for its Kenyan and Democratic Republic of Congo units and a 6.7% stake in the lender that the IFC acquired from Britam for Sh13.9 billion in April.

Last year, Equity raised its borrowings from the IFC by Sh17.1 billion to Sh38.9 billion, overtaking KCB as the lender with the highest exposure to IFC credit. KCB and Co-operative Bank carried IFC loans worth Sh27.9 billion and Sh17.9 billion respectively by the end of last year, while loans to DTB and NCBA stood at Sh6.35 billion and Sh814 million respectively.

The foreign currency loan also builds up these banks’ forex positions — just like the government’s external borrowing bulks up official forex reserves —which allows them to support businesses that import products or raw materials.

-Buisness daily.

https://www.businessdailyafrica.com/bd/corporate/companies/ifc-bets-big-on-kenyan-banks-3885364

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