EQUITY BANK TO GIVE MONEY TO POOR KENYANS: CHECK IF YOU QUALIFY.

Equity Group has acquired a US$ 165 million (Ksh18.6 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.  IFC encourages the banks it funds to lend to women-owned enterprises and climate-related ventures such as renewable energy projects.

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, which will ultimately support hundreds of Kenyan businesses in the manufacturing, health, trade, transport, and consumer goods sectors, 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.

“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 US$ 50 million (Ksh5.6 billion), with the remaining US$ 115 million (Ksh13 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.

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 Ksh55 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.

Sourced from Business today