Bank One to Receive Kshs 3.8 Billion Loan from The IFC

Mauritius based Bank One, in which Kenyan banking group I&M Holdings has a 50 percent stake, is set to receive a USD 37.5 million (3.8 billion shillings) loan from the International Finance Corporation (IFC), with an undisclosed tenor.

According to Cytonn’s Weekly Report, the loan will be classified as senior debt, therefore ranking higher than other Bank One’s obligations.

The bank intends to use this loan to strengthen its long-term funding position and to expand its lending operations to SMEs in Mauritius that fit their lending criteria; that is, SMEs with 10 to 300 employees and annual sales of 10 million shillings to 1.5 billion shillings.

Financial inclusion is one of IFC’s priorities and it has continued to support financial institutions and financial services providers across Sub-Saharan Africa.

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IFC hopes to advance financial inclusion and increase access to finance for underserved markets because access to finance remains a major constraint for many SMEs, with many banks opting to lend to well-established firms presumed to be less risky and thus curtailing the growth of SMEs.

A recent report done by the IFC indicated that over 200 million SMEs in Africa lack access to credit necessary to grow and prosper.

In Kenya, the IFC has issued loans to several banks including a 15.5 billion shillings loan issued in February 2018 to Co-operative Bank with a tenor of 7 years, and a 1 billion shillings loan issued to I&M Holdings in January 2018, with an undisclosed tenor.

For banks, access to loans from international institutions has been instrumental to their survival as it has helped them bridge the asset-liability mismatch by tenor due to the relatively long-term nature of loans and short-term nature of deposits.

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