GTBank Kenya gets Sh1.7bn IFC loan for lending to SMEs

The International Finance Corporation has disbursed a $15 million (Sh1.7 billion) loan to Guaranty Trust Bank Kenya for onward lending to small and medium sized firms that were adversely affected by the Covid-19 pandemic.

The loan was first disclosed by the global financier in October when it said the debt was a one-year facility that carried an option of rolling over for another year at its discretion.

The funds are drawn from IFC’s $8 billion (Sh908 billion) facility for emerging markets clients affected by the economic fallout from the pandemic.

“The IFC loan will help the bank meet the working capital and trade-related needs of businesses, especially SMEs that are part of our core clientele,” said GTBank Kenya managing director Olabayo Veracruz.

“These businesses were adversely affected by the pandemic and are now recovering and reviving as the economy opens up, therefore requiring the support of the Bank through access to credit.”

He said the bank plans to lend the money to customers in trade, fast moving consumer goods, manufacturing and pharmaceutical sectors, primarily to fund their working capital needs over the next year.

GTBank Kenya had a loan book of Sh24.83 billion in the nine months to September when its net profit grew 53.8 percent to Sh898.6 million.

The bank is a subsidiary of Lagos-based Guaranty Trust Holding Company Plc. The Nigerian multinational acquired the Kenyan bank, previously trading as Fina Bank, in December 2013.

The IFC defines SMEs using various measures including firms having between 10 and 300 employees or annual sales of $100,000 (Sh11.4 million) to $15 million (Sh1.7 billion).

The loan size per borrower usually ranges from $10,000 (Sh1.14 million) to $2 million (Sh227 million). IFC also encourages the banks it funds to lend to women-owned enterprises and climate-related ventures such as renewable energy projects.

It has also lent other Kenyan lenders such as KCB, Cooperative Bank and Equity funds to on-lend to SMEs.