To spur private sector growth and promote access to finance in Kenya, including for women-owned businesses and businesses focused on addressing climate change, IFC announced today a partnership with Bank of Africa Kenya (BOA Kenya).
Through the partnership, IFC will enter a risk-sharing facility with BOA Kenya that will help the bank scale up lending to small and medium-sized enterprises (SMEs). The facility will cover 50 percent of losses on all eligible loans that BOA Kenya extends to SMEs, up to the equivalent of $5 million in local currency shillings.
Drawing on its global experience, IFC will also advise the bank on developing innovative risk-mitigation tools and help build its capacity to serve the SME sector, which employs roughly 15 million Kenyans.
"IFC’s risk-mitigation product, combined with general and targeted advisory services support, will help BOA Kenya decrease risk and scale up its lending to SMEs in its most challenging markets. Also, it will help us transform into an SME-focused bank with branches across Kenya," said Ronald Marambii, Managing Director of Bank of Africa Kenya.
"Smaller businesses are the backbone of Kenya’s economy but many struggle to secure financing in part because they are viewed as too risky," said Amena Arif, IFC Country Manager for Kenya. "With the right procedures, banks can overcome those risks, securing a robust client base while helping to drive economic growth and job creation."
The COVID-19 pandemic has negatively impacted Kenya’s economy, sharply reducing economic activity. Even before the pandemic, many Kenyan SMEs struggled to access financing due to their perceived higher risk. Reducing that risk will help these businesses more easily access financing for growth.
IFC’s partnership with BOA Kenya is supported by the Global SME Finance Facility (GSMEF) and the Women Entrepreneurs Opportunity Facility (WEOF).
GSMEF is a partnership between IFC and the United Kingdom’s Foreign, Commonwealth and Development Office and the Netherlands Ministry of Foreign Affairs. WEOF, a global finance facility dedicated to expanding access to capital for women entrepreneurs, was launched in 2014 by IFC through its Banking on Women program, and Goldman Sachs 10,000 Women.
"We need to support female entrepreneurs with access to capital in order to facilitate their growth, particularly given the impact of COVID-19," said Charlotte Keenan, Global Director of Goldman Sachs 10,000 Women . "We are pleased to support the Bank of Africa Kenya as it expands lending to women-owned businesses in Kenya in this challenging time."
The facilities are dedicated to closing the […]