KENYA – International Finance Corporation (IFC), the private sector arm of the World Bank has given Co-operative Bank of Kenya US$75 million loan for onward lending to micro, small and medium-sized (MSMEs) firms crippled by the Covid-19 pandemic.
The Kenyan lender announced that the International Finance Corporation (IFC) loan will come in as a tier II supplementary capital and will be repaid within seven years.
Co-operative Bank Chief Executive Officer Gideon Muriuki said the money will support MSME customers to cope with the disruptions brought about by the pandemic.
“The funding has come at a most opportune time as it boosts our ability to better support our MSME customers to stabilise and turn-around their businesses to meet the challenges brought about by the pandemic,” said Mr Muriuki.
The money will also benefit businesses undertaking climate friendly projects such as sustainable agricultural practices and renewable energy.
The CEO said the loan will enhance the bank’s assets and liability match, with long-term loans to customers being financed using the long-term debt.
“International Finance Corporation (IFC) loan will come in as a tier II supplementary capital and will be repaid within seven years”
The IFC loan to Co-operative Bank brings the total lending to Kenya’s top three banks to US$275 million in under six months.
KCB and Equity banks last year also received US$150 million and US$50 million respectively from IFC for MSME lending.
The credit line is part of IFC’s global $8 billion fast-track Covid-19 facility it announced in March last year and cements the international lender’s position as the largest financier of local banks.
Co-operative Bank said it wants to ride on its balance sheet that stood at US$4.6 billion at the end of September last year to enhance the bank’s opportunities for growth and overall performance.
The bank in August 2018 also rolled out a US$150 million partnership programme with IFC, to provide affordable financing and business training to Kenyan MSMEs.
Over 110,000 customers in Kenya had taken up the MSME loans amounting to US$134.4 million at the end of September last year while another 8,950 entities had been trained on business management and planning.
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