Co-op Bank secures IFC loan from Sh8bn for small businesses
- The lender said on Monday that the loan from the International Finance Corporation (IFC) would constitute additional capital and would be repaid within seven years.
- Co-op Bank CEO Gideon Muriuki said the money will help MSME clients cope with the disruption caused by the pandemic.
Co-operative Bank of Kenya #ticker: COOP secured a loan of 75 million dollars (8.3 billion shillings) from the private sector of the World Bank for subsequent loans to crippled micro, small and medium enterprises by the Covid-19 pandemic.
The lender said on Monday that the loan from the International Finance Corporation (IFC) would constitute additional capital and would be repaid within seven years.
Co-op Bank CEO Gideon Muriuki said the money would help MSME clients cope with the disruption caused by the pandemic.
“The funding has come at a very opportune time as it strengthens our ability to better help our MSME clients stabilize and turn around their businesses to meet the challenges posed by the pandemic,” said Mr. Muriuki.
The money will also benefit companies that undertake climate-friendly projects, such as sustainable farming practices and renewable energy.
Muriuki said the loan would improve the match between the bank’s assets and liabilities, as long-term loans to customers are funded using long-term debt.
IFC’s loan to Co-op brings total loans to Kenya’s three largest banks to $ 275 million (Sh 30.3 billion) in less than six months.
Last year, KCB and Equity also received 150 million and 50 million respectively from IFC for loans to MSMEs.
The line of credit is part of IFC’s $ 8 billion accelerated global Covid-19 facility it announced in March last year, and solidifies the international lender’s position as the banks’ largest financier local.
Co-op Bank said it wanted to tap its balance sheet which stood at 510 billion shillings at the end of September last year to improve the opportunities for growth and overall performance of the bank.
In August 2018, the bank also launched a $ 150 million (16.5 billion shillings) partnership program with IFC, to provide affordable financing and business training to Kenyan MSMEs.
More than 110,000 clients had taken out MSME loans worth 14.8 billion shillings by the end of September last year, while 8,950 other entities had been trained in management and planning. business.