Co-operative Bank Group has procured a loan of $60 million (Sh5.1 billion) from the International Finance Corporation (IFC), the private sector lending arm of the World Bank Group.
The proceeds of the seven-year dollar denominated loan facility will be used for onward-lending to the Small and Medium-sized Enterprises (SMEs) and players in the agricultural sector.
The bank’s Managing Director Gideon Muriuki said the funds would be channeled to the export sector, focusing on customers with healthy cash flow positions, and the capacity to repay.
“The prime consideration will be the capacity of those customers to repay the loan,” Muriuki told a media briefing after signing the loan agreement at the Bank’s head offices in Nairobi yesterday.
This comes barely a year after the bank acquired a 70 million euro (Sh7.5 billion) long-term debt from the European Investment Bank (EIB) for onward lending to the SMEs and small entrepreneurs.
Economic inclusion
IFC’s new Regional Director for East and Southern Africa, Cheick Oumar Seydi, said the loan is designed to boost Coop bank SME finance programme, support agricultural projects and promote economic inclusion in East Africa.
Mr Seydi noted that although access to finance is a lifeline for small businesses, entrepreneurs in many African countries are still excluded from the financial services.
“Co-op Banks business model is very close to IFC’s heart not only because we are both committed to the SME sector, but also because we share a vision for agriculture as a driving force of Kenya’s economy,” he said.
Seydi noted that although SMEs are small, they have a very large impact on the economy.
He revealed that IFC has also extended $5 million (Sh430 million) trade line to Coop Bank through its Global Trade Finance Program. He said program provides banks in emerging markets with guarantees to cover risks associated with trade.
“We are also excited to welcome Co-op Bank to the program and hope they will benefit from it,” said Seydi.
Source :standardmedia.co.ke
