Equity Group has acquired a Ksh. 165 billion (USD 165 million) loan from the International Finance Corporation (IFC) to help it increase working capital and trade-related lending to its SME clients in Kenya. The lending will focus on SMEs facing COVID-19 related challenges.

Besides strengthening the bank’s capital base, the new loan will also be lent to customers fitting IFC’s impact investing criteria. IFC will partly support Equity’s lending towards Climate Smart Projects and the local SME sector which was hard hit by the COVID-19 containment measures.

The loan, which will support hundreds of Kenyan businesses in the manufacturing, health, trade, transport, and consumer goods sectors, is part of IFC’s global fast-track COVID-19 facility. The facility is designed to help businesses maintain operations and jobs pre and post the COVID-19 crisis.

Commenting on the loan, Dr. James Mwangi, Equity Group Managing Director and CEO said, “IFC’s loan, part of our business continuity management plan, will help Equity Bank extend much-needed support to our clients, particularly to SMEs in sectors hit hard by COVID-19. We have purposed to support and walk with them so that they can survive during this crisis, recover, and thrive after it.”

According to the deal, IFC will directly provide Ksh. 5.6 billion (USD 50 million), with the remaining Ksh. 13 billion (USD 115 million) coming from partners. The facility will also acquire 164.5 million shares of the lender directly and another 88.5 million shares through its IFC Financial Institutions Growth Fund LP.

On his part, Manuel Moses, IFC Country Manager for Kenya said, “IFC’s longstanding partnership with Equity Bank underscores our commitment to Kenya’s financial sector and wider economy, especially during these difficult economic times. Keeping businesses solvent and protecting jobs are essential parts of IFC’s response to the unprecedented challenges of COVID-19.”