IFC Loans: Equity Group has acquired a Sh. 18.6 billion loan from the International Finance Corporation (IFC). The loan comes barely days after the IFC announced that it was acquiring a Sh. 12.2 billion stake in the lender.
The new loan is expected to increase the lender’s working capital and trade-related lending to its small and medium-sized enterprise (SME) clients in Kenya.
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.
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.
World Bank’s IFC buys Sh. 12.2 billion stake in Equity Bank
The facility will partly support Equity’s lending towards Climate Smart Projects and the local SME sector which was hard hit by the pandemic’s containment measures.
“IFC’s loan, which is 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 the pandemic. We have purposed to support and walk with them so that they can survive during this crisis, recover, and thrive after it,” said Equity Bank chief executive officer Dr. James Mwangi.
According to the deal, IFC will directly provide Sh. 5.6 billion, with the remaining Sh. 13 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,” said Manuel Moses, the 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 Sh. 55 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.