Coop bank gets Sh5.1bn loan to boost lending
What you need to know:
- Bank becomes the 11th institution to be offered cash by IFC, after Equity, KCB, DTB and KTDA
An international financial institution has advanced Co-operative Bank a Sh5.1 billion loan to boost its lending kitty.
The loan agreement between the bank and the International Financial Corporation was signed on Wednesday at Coop Bank headquarter in Nairobi.
“We are pleased to announce that the loan will support our growing borrowing client base,” said Coop bank’s group managing director Gideon Muriuki in Nairobi.
Trade credit
IFC will also be extending an extra Sh425 million trade credit to the bank through its Global Trade Finance Programme. The money will be advanced to small and medium businesses transacting in foreign currency.
“This being a dollar-based facility the focus will be on the export market. If you borrow in US dollars and you do not have dollar income, you could be exposed to foreign exchange risk,” he said.
Last month, the company signed a €70 million (about Sh7.5 billion) with EIB on a similar loan agreement.
The money will be repaid over seven years at 7 per cent interest rate.
The loan is part of IFC’s strategy to increase agribusiness on the continent.
“I am hopeful that the farmers will have access to finances to extend their operations the way it works for them and, more important, to be able to provide for their families,” said the incoming IFC’s regional and sub-Saharan director Oumar Seydi.
Coop bank becomes the 11th financial institution to be offered a loan agreement with IFC.
Other company’s in previous partnerships include Equity Bank (Sh8.3 billion), KCB (Sh8.9 billion), Diamond Trust Bank (Sh2.1 billion) and Kenya Tea Development Agency (Sh1 billion).
In its latest financial statement, Coop bank increased its loan book by 11.3 per cent to record Sh118.4 billion for the nine months ending September, compared with Sh106.4 billion recorded last year during the same period.
The bank is also eyeing the South Sudan market where it will start its operations in February next year after signing an agreement with its government to have a 51-49 shareholding partnership.
