· The International Finance Corporation (IFC) has disclosed its plan to lend $165 million (Sh21.1 billion) to the Kenyan banking subsidiary of Equity Group.
· Out of this, $50 million funding will go from IFC while the balance of $115 million will go from its partners.
· Coming soon after IFC’s decision to acquire a 6.7 percent stake in the Nairobi Securities Exchange-listed firm for Sh13.9 billion, the proposed investment will be one of the largest single credit facilities to a local lender.
The International Finance Corporation (IFC) has disclosed its plan to lend $165 million (Sh21.1 billion) to the Kenyan banking subsidiary of Equity Group. Out of this, $50 million funding will go from IFC while the balance of $115 million will go from its partners. Coming soon after IFC’s decision to acquire a 6.7 percent stake in the Nairobi Securities Exchange-listed firm for Sh13.9 billion, the proposed investment will be one of the largest single credit facilities to a local lender.
The Equity Bank, the second-largest bank in Kenya has total assets of $7.2 billion (Sh923 billion) as of September 30, 2021. Through its wide nationwide presence, a network of 190 branches, over 380 ATMs, and over 42,000 banking agents. the bank serves over 10.7 million customers. The bank is a wholly-owned subsidiary of Equity Group Holdings, a key partner for IFC in East Africa. The Bank has a significant regional presence and subsidiaries in Kenya, Uganda, Tanzania, South Sudan, Rwanda and the Democratic Republic of Congo (DRC).
In a statement, IFC revealed that the planned investment consists of a seven-year Tier 2, Basel II-compliant subordinated loan of up to $165 million (Sh21.1 billion) to Equity Bank Kenya Limited. The lending is expected to boost the bank’s regulatory capital and support its lending operations to climate-smart projects and small and medium enterprises (SMEs) in Kenya.
IFC is also poised to be Equity bank’s second-largest shareholder. It has signed an agreement to purchase insurance firm Britam’s stake in the lender.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. IFC had already lent the bank Sh21.8 billion as of December 2020.
