MICROCAPITAL BRIEF: International Finance Corporation (IFC) Loans $100m to Equity Bank to Support SMEs, Renewable Energy in Kenya

The International Finance Corporation (IFC), a member of the World Bank Group, recently loaned KES 10 billion (USD 100 million) to the Kenyan member of the Equity Bank Group, a provider of microfinance and conventional financial services in six countries, to: (1) increase its lending to small and medium-sized enterprises (MSMEs); (2) enhance its regulatory capital; and (3) finance renewable energy projects. IFC also will provide Equity Bank Kenya with advisory support related to the subordinated loan, the cost of which has not been revealed. The IFC-funded loans will range in size from KES 1 million (USD 10,000) to KES 200 million (USD 2 million) to benefit firms that fit at least one of the following criteria: (1) employing 10 to 300 people; or (2) posting annual sales of KES 10 million (USD 100,000) to KES 1.5 billion (USD 15 million).

Equity Bank Kenya, founded in 1984 and based in Nairobi, provides loans, savings and fund transfer services. As of 2017, the subsidiary has 177 offices, 480,000 borrowers and 10 million depositors. As of December 2017, Equity Bank Group reported USD 3.9 billion in total assets, a gross loan portfolio of USD 2.1 billion and deposits of USD 2.9 billion from operations in the Democratic Republic of Congo, Kenya, Rwanda, South Sudan, Tanzania and Uganda.

IFC offers loans, equity investments, advisory services and technical assistance to private companies with the intent of alleviating poverty and promoting open and competitive markets in developing countries. As of 2018, IFC reports total assets of USD 94.2 billion.

The World Bank Group is a multilateral organization whose goal is “to end extreme poverty and promote shared prosperity in a sustainable way.” As of 2018, it has 189 member nations. The group encompasses: (1) the International Bank for Reconstruction and Development and the International Development Association, which make up the World Bank; (2) IFC; (3) the Multilateral Investment Guarantee Agency; and (4) the International Centre for Settlement of Investment Disputes. During the 12 months ending June 2018, the World Bank Group disbursed funds totalling USD 46 billion.

By Shuyang Sun, Research Associate

Sources and Additional Resources

Equity gets Sh10bn IFC loan for onward lending
https://www.nation.co.ke/business/Equity-gets-Sh10bn-IFC-loan-for-onward-lending/996-4998258-j68y6qz/index.html

Equity Bank Group homepage
http://equitybankgroup.com

MIX Profile: Equity Bank Kenya
https://www.themix.org/mixmarket/profiles/equity-bank-ken

Would Bank homepage
https://www.worldbank.org

IFC homepage
https://www.ifc.org

IFC 2017 Annual Report
https://www.ifc.org/wps/wcm/connect/662fa2fc-4f44-4574-924a-e669f571b987/IFC-AR18-Highlights-Brochure.pdf?MOD=AJPERES

MICROCAPITAL BRIEF: Banco Santander, IFC Lending $300m to Bradesco to Support MSMEs in Brazil
https://www.microcapital.org/microcapital-brief-banco-santander-ifc-lending-300m-to-bradesco-to-support-msmes-in-brazil/

Did you know that MicroCapital publishes the MicroCapital Monitor newspaper each month? Find out more at https://www.microcapital.org/products-page/.