KENYA – Guaranty Trust Bank Kenya is set to receive Kshs 1. 6 billion (US$14.46 million) from The International Finance Corporation (IFC) for onward lending to small and medium-sized firms (SMEs).

The loan is part of IFC’s funding of financial institutions in emerging markets under its Covid-19 crisis response program.

The loans are designed to be disbursed to companies whose cash flows have been disrupted by the pandemic, helping to boost their working capital among other needs.

“The proposed loan of US$14.46 million is a one-year loan, with the option to be rolled over for an additional year at IFC’s discretion. The loan will provide GTBK additional liquidity support for its operations amidst prevailing economic challenges,” IFC said in its investment disclosures.

“This project will avail working capital and trade-related loans to borrowers, predominantly SMEs, stabilizing supply chains and re-enforcing resilience in critical sectors such as trade, fast-moving consumer goods, pharmaceuticals, and manufacturing, that have been impacted by the pandemic.”

The bank is a subsidiary of Lagos-based Guaranty Trust Holding Company Plc.

The Nigerian multinational acquired the Kenyan bank, previously trading as Fina Bank, in December 2013.

Guaranty Trust Bank Kenya now has nine branches with a focus on corporate, SME, and personal banking.

The bank will provide loans to clients fitting the criteria established by IFC.

“This project will avail working capital and trade-related loans to borrowers, predominantly SMEs, stabilising supply chains and re-enforcing resilience in critical sectors such as trade, fast moving consumer goods, pharmaceuticals and manufacturing, that have been impacted by the pandemic”

The global financier defines SMEs using various measures including firms having between 10 and 300 employees or annual sales of Kshs 11 million (US$100,000) to Kshs 1.6 billion) US$14.46 million.

The loan size per borrower usually ranges from Kshs 1.1 million (US$10,000) to Kshs 221 million (US$2 million.

IFC also encourages the banks it funds to lend to women-owned enterprises and climate-related ventures such as renewable energy projects.

The proposed loan to the lender is the latest for the IFC, which has been funding scores of Kenyan banks including KCB and Co-operative Bank.

In August 2021, IFC also partnered with FMO, a Dutch development bank, to assist small businesses in Kenya by providing funds for working capital, expansion, and to weather the COVID-19 crisis.

According to the IFC website, the institution has provided loans worth more than US$395 million to Kenyan companies since March 2020.

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