Kenya’s Equity Bank expects to pen a $50 million(Sh5.3 billion) loan deal from the World Bank’s private arm, in a move to shelter SMEs against the Covid-19 pandemic.
According to the disclosure, the International Finance Corporation(IFC) anticipates a multi-billion shilling loan that will cushion Equity Bank while maintaining at least 65 percent of its loan book to small traders and firms. As it stands, the lender has recalled Sh9billion in dividends plus dropping plans of expansion with purchase of regional banks.
“The proposed IFC Investment is a senior loan of up to $50 million(Sh5.3 billion) with a tenor of one-year renewable,” reads the investment disclosure.
“By sustaining the bank’s ability to provide working capital and trade finance, IFC’s facility is intended to promote the resilience of trade finance markets and the broader stability that comes about by providing for the going concern of market participants in Kenya,” adds the financier.
Further, the new credit facility will have the firms that benefit expected to meet IFC’s set criteria for lending to be possible. Firms must be having 10 to 300 employees or annual sales revenues totaling Sh10 million to Sh1.5 billion for a loan range of Sh1 million to Sh200 million.