The International Finance Corporation (IFC) announced that it had provided a $15 million loan to Guaranty Trust Bank (Kenya) Ltd to lend to local businesses in the country, making it the third bank to secure such a facility in the country. Kenya since the beginning of this year.
Earlier this month, I&M Bank and Equity Bank received loans from IFC, which is part of IFC’s program to support local small and medium-sized enterprises (SMEs), including those with cash flow are disrupted by the Covid-19 pandemic.
In a statement, IFC said GT Bank Kenya, a subsidiary of Guaranty Trust Group, will provide access to finance primarily to SMEs in the trade, consumer goods, pharmaceutical and manufacturing sectors, among others, by helping to retain and create jobs, and strengthening their operations.
IFC’s $15m loan to GTBank Kenya is part of the $8bn IFC Fast Track Covid-19 facility launched in 2020. The facility is designed to support existing IFC clients in affected emerging markets by the economic fallout from Covid-19.
“The IFC loan will help the Bank meet the working capital and business needs of businesses, especially SMEs who are among our core clients. These businesses have been hit hard by the pandemic and are now in the process of recovering and reviving as the economy opens up, therefore requiring the Bank’s support via access to credit,” the Director said. General of GTBank Kenya, Olabayo Veracruz.
“We hope to on-lend the facility to customers in the retail, consumer packaged goods, manufacturing and pharmaceutical sectors, primarily to fund working capital needs over the next year.”
Amena Arif, IFC Country Manager for Kenya, said, “Our partnership with GTBank Kenya will provide funds to businesses, enabling them to emerge stronger from the Covid-19 crisis.”
This month, IFC announced it would lend $165 million to Equity Bank Kenya Limited, in addition to acquiring a 6.7% stake in Equity Bank for $139 million, shares that were previously held by Britam. .
“IFC is committed to supporting Kenya’s private sector, including strengthening its financial sector to help small businesses in the country access more financing,” said Ms. Arif.
Pandemic-related disruptions led to a contraction in Kenya’s real GDP in 2020, with the country’s small businesses hit hard by supply chain disruptions and reduced economic activity. Although Kenya has returned to pre-pandemic growth levels in 2021, this year is also proving challenging and small businesses still need additional support to weather the lingering uncertainties.
IFC’s investment portfolio in Kenya stood at $940.1 million as of June 30, 2021, with most investments in the finance, manufacturing, agribusiness and services sectors.
