Skip to content
Market News

IFC To Give DTB USD 100 Million As Loan For SMEs

BY Soko Directory Team · November 21, 2022 09:11 am

KEY POINTS

The facility is aimed at providing loans to Small and Medium Enterprises (SMEs) in Kenya operating in sectors such as Real Estate, Trade, and Agriculture among others which are yet to fully recover from the effect of the pandemic.

The International Finance Corporation (IFC) disclosed that it would extend USD 100.0 million (12.2 billion shillings) to Diamond Trust Bank (DTB) under the WCS COVID-19 FIGE response facility in form of a senior debt investment with 24-month maturity and renewable once on an aggregate of up to 36 months.

The facility is aimed at providing loans to Small and Medium Enterprises (SMEs) in Kenya operating in sectors such as Real Estate, Trade, and Agriculture among others which are yet to fully recover from the effect of the pandemic.

This is the second facility in the last three years that IFC is lending to DTB following a USD 50.0 mn (Kshs 5.4 bn) loan facility in August 2020 which was also aimed at supporting SMEs that had been affected by the COVID-19 pandemic.

Additionally, this is the third loan facility during this year that IFC has extended to Kenyan banks following a USD 165.0 mn (19.2 billion shillings) it extended to Equity Group in May 2022 and USD 150.0 mn (18.0 billion shillings) it extended to KCB Group in August 2022.

Upon disbursement, the credit facility will provide DTB additional liquidity to sustain lending to SMEs amid the current adverse macroeconomic situation coupled with elevated the cost of borrowing following the MPC decision to hike the Central Bank Rate by 75.0 bps to 8.25 percent in September 2022, from the previous 7.50 percent.

Further, we expect such facilities from Development Finance Institutions such as IFC to continue boosting credit access to the private sector which is currently low at 26.1 percent of GDP.

At the same time, the Kenyan banking sector’s Return on Equity (ROE) of 27.2 percent compared to other economies’ average of 13.9 percent, indicates an overreliance on banks as a source of capital, which poses challenges to the ordinary person due to high cost of lending.

To avoid overreliance on banks, there is a need to stimulate the capital markets to offer alternative sources of capital.

Soko Directory is a Financial and Markets digital portal that tracks brands, listed firms on the NSE, SMEs and trend setters in the markets eco-system. Find us on Facebook: facebook.com/SokoDirectory and on Twitter: twitter.com/SokoDirectory

Trending Stories
Investment Your Investment Plan For 2025: Mansa X (19.53%) vs. Oak Fund (29.38%) – 2024 Performance, Which Should You Invest In? Steve Biko Wafula
Entrepreneur's Corner When the Days Grow Quiet: Why Men Must Plan For Their Old Age Steve Biko Wafula
Entrepreneur's Corner 15 Reasons Why You NEED NCBA Now: The Bank Fueling Ambition And Entrepreneurship In Kenya Steve Biko Wafula
Entrepreneur's Corner New Year, New Financial Goals With NCBA: Why Financial Literacy Is The Real Resolution Soko Directory Team
Government and Policy HELB Opens Loans And Bursary Application For Students, How To Apply Getrude Mathayo
Related Articles
Market News Kenya Airways Sustains Rising Streak, Ends The Day As Top Gainer Soko Directory Team
Market News Government Borrowing in FY24/25: A Closer Look at Progress And Market Dynamics Soko Directory Team
Market News Liquidity Conditions In The Money Market: A Stable Start To The Year Soko Directory Team
Market News Kenya Airways Top Gainer At The NSE As Equity Turnover Expands 42% Standard Investment Bank
Market News Kenyan Shilling Holding Forte This Njaanuary Dyer and Blair
Explore Soko Directory
Banking Blogging Commodity Watch Did you know Entertainment Entrepreneur's Corner Feature Government and Policy Headlines Investment Lifestyle Market News Money Opinion Press Releases Stock Watch Technology
Soko Directory Archives