Small and medium-sized enterprise (SMEs) in Kenya are set to benefit from Ksh18.6 billion climate action funding from equity.
This is after the lender acquired a Ksh18.6 billion ($ 165 million) loan from the International Finance Corporation (IFC) to cushion business ventures facing COVID-19 related challenges.
According to the lender the facility will partly support Equity’s lending towards Climate Smart Projects and the local SME sector.
According to the deal, IFC will directly provide Ksh5.6 billion, with the remaining Ksh 13 billion coming from partners.
“IFC’s loan is part of our business continuity management plan that will help Equity Bank extend much-needed support to our clients, particularly to SMEs in sectors,” said Dr. James Mwangi, Equity Group Managing Director and CEO.
The loan is set to benefit Kenyan businesses in the manufacturing, health, trade, transport, and consumer goods sectors, is part of IFC’s global $8 billion fast-track COVID-19 facility, announced in March and designed to help businesses maintain operations and jobs during—and after—the COVID-19 crisis.
The loan from IFC, which is a member of the World Bank Group, is one of the single-largest credit facilities to a Kenyan lender.
IFC is also set to become the bank’s second-largest shareholder after signing an agreement to purchase insurance firm Britam’s stake in the lender. The institutional investor will buy 253.1 million shares of the bank from Britam at Sh55 each based on negotiations with the insurer.
IFC will acquire 164.5 million shares of the lender directly and another 88.5 million shares through its IFC Financial Institutions Growth Fund LP.
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