To support small and medium-sized enterprises (SMEs) that are struggling during the COVID-19 pandemic, the International Finance Corporation (IFC), the private-investment arm of the World Bank Group, recently issued a loan of USD 50 million to Nairobi-based Diamond Trust Bank Kenya Limited (DTB Kenya). The targeted sectors include financial institutions, tourism, manufacturing and healthcare.
Manuel Moses, the IFC Country Manager for Kenya, stated, “IFC’s partnership with DTB Kenya is part of our strategy to help businesses in Kenya manage the impacts of COVID-19 so they can continue providing essential goods and services. IFC is committed to helping countries across Africa meet the unique challenges of COVID-19 and also speed the process of recovery.”
IFC is funding the loan through Working Capital Solutions, its program that provides one-year, renewable loans to banks to on-lend to SMEs for working capital and trade finance “in markets where macroeconomic factors have caused a reduction in the availability of US dollars.”
Founded in 1945, DTB Kenya is listed on the Nairobi Securities Exchange and is an “affiliate” and of the Switzerland-based nonprofit Aga Khan Development Network, the majority shareholder at 16.50 percent. As of March 2020, DTB Kenya held total assets of KES 385 billion (USD 3.5 billion). During 2019, it generated 1.8 percent return on assets and 12 percent return on equity as well as 600,000 customers served. In addition to Kenya, there are DTB banks in Burundi, Tanzania and Uganda.
IFC offers loans, equity investments, advisory services and technical assistance to private companies with the intent of alleviating poverty and promoting open and competitive markets in developing countries. As of 2019, it reported total assets of USD 94.3 billion.
By Daron Weber, Research Associate
Sources and Additional Resources
IFC press release on loan to DTB Kenya
www.ifcextapps.ifc.org/ifcext/pressroom/ifcpressroom.nsf/1f70cd9a07d692d685256ee1001cdd37/edf991ba89e1e4b3852585c200259589
IFC description of Working Capital Solutions
www.ifc.org/wps/wcm/connect/industry_ext_content/ifc_external_corporate_site/financial+institutions/priorities/global+trade/working+capital+systemic+solutions
Diamond Trust Bank homepage www.dtbafrica.com/ 2019 Integrated Report and Financial Statements www.dtbk.dtbafrica.com/sites/default/files/downloads/Intergrated%20report.pdf DTB Kenya interim report, first quarter 2020 www.africanfinancials.com/document/ke-dtk-2020-ir-q1/ AKDN homepage www.akdn.org World Bank Group press release on response to COVID-19 www.worldbank.org/en/news/press-release/2020/03/17/world-bank-group-increases-covid-19-response-to-14-billion-to-help-sustain-economies-protect-jobs Previous MicroCapital post on IFC www.microcapital.org/microcapital-brief-ifc-lends-100m-to-procredit-holding-to-finance-small-medium-sized-enterprises-smes-in-eastern-southeastern-europe-ecuador/ Do you know that MicroCapital publishes the MicroCapital Monitor newspaper each month? Find out more at www.microcapital.org/products-page/. Similar Posts: MICROCAPITAL BRIEF: IFC Lends $100m to ProCredit Holding to Finance Small, Medium-Sized Enterprises (SMEs) in Eastern, Southeastern Europe; Ecuador MICROCAPITAL BRIEF: IFC Boosts COVID-19 Response to $8b for Working Capital, Risk-sharing, Trade Finance, “Real Sector” Finance Worldwide; Including $294m Deployed to Target SMEs in […]
