IFC to offer $75 mn in debt funding to Kenyan bank

 IFC to offer $75 mn in debt funding to Kenyan bank

International Finance Corporation plans to provide up to US$75 million to the Co-operative Bank of Kenya Ltd to help it strengthen its capital base and make loans to micro, small and medium-sized enterprises.

The proposed subordinated loan to the bank will have a tenor of seven years with a five-year grace period, the World Bank’s private-sector investment arm said in a disclosure.

IFC said the loan will support the bank’s lending program to expand access to finance for MSMEs in Kenya, which are likely to be highly affected by the COVID-19 pandemic.

The Kenyan bank is a systemic lender in the African nation, with the largest number of clients and ranked fourth by assets. It has been growing sustainably despite operating in a challenging market environment over the last years, IFC said.

The bank’s largest shareholder is Coop Holdings with a 65% stake on behalf of over 3,800 cooperative societies and unions ring-fenced under Coop Holding after the Bank was listed in 2008, in order to retain the critical co-operative identity of the Coop Bank. Excluding Coop Holding, no individual shareholder holds more than 2% of the bank.

IFC is one of the most active private investors in the developing economies of Africa and Asia. It makes both direct debt and equity investments in companies operating across the continents. It also acts as a limited partner to private equity and venture capital funds that invest in these countries.

Vivek Sinha

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