IFC World Bank: Equity Bank Kenya has received Sh. 5.3 billion loan from the World Bank’s private lending arm International Finance Corporation (IFC). This loan is aimed at onward lending to small and medium enterprises.
“The proposed IFC investment is a senior loan of up to $50 million (Sh. 5.3 billion) with a tenor of one-year renewable. The investment will help expand the bank’s lending operations to the micro small and medium enterprises (MSMEs) segment in Kenya, especially to companies whose cash flows have been disrupted by the outbreak of the coronavirus pandemic,” the IFC said.IFC World Bank
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The IFC further noted that the new loan will facilitate the second largest bank in Kenya to advance new loans to more customers.
“By sustaining the bank’s ability to provide working capital and trade finance, IFC’s facility is intended to promote the resilience of trade finance markets, as well as broader stability that comes about by providing for the going concern of market participants in Kenya. IFC anticipates that the project will help best position the private sector to support the economic recovery process, shortening the time it will take for the most vulnerable to return to their traditional income-earning opportunities,” said IFC in its investment disclosure statements.
Equity Bank currently channels about 65 percent of its loan book to small and medium enterprises in Kenya. IFC World Bank.
In May this year, Equity announced the withdrawal of dividend. This was the first time the country’s second-largest bank by assets had skipped dividends since listing on the Nairobi Securities Exchange (NSE) in August 2006.
In the period ended March 31, 2020, Equity posted Sh. 5.2 billion in net profit, a 14 percent decline from Sh. 6.1 billion in a similar period last year. The lender was hit by growing bad loans which rose from Sh. 29.3 billion to Sh. 44.6 billion, consisting of mainly traders whose supply chains have been disrupted by impact of the coronavirus.