Sh2bn from IFC to boost bank's lending
International Finance Corporation, the private sector lending arm of the World Bank, has signed a $26 million (about Sh2 billion) financing package with Diamond Trust Bank Group.
The bank on Wednesday said Sh1.6 billion would go DTB Kenya to improve its capacity to provide long-term lending, especially to small and medium enterprises.
In separate agreements, DTB Tanzania and DTB Uganda will get Sh240 million ($3 million) trade finance guarantee each to increase the trade finance instruments it issues on behalf of SMEs that import goods to East Africa.
“This is will leverage our ability to provide long-term finance as well as increase our trade finance activities, helping our local SMEs grow and compete in the international marketplace,” said ms Nasim Devji, the DTB Group CEO.
IFC Global director of short-term lending Georgina Baker said the bank would help DTB increase the impact small businesses and trade have on jobs and economic development.
IFC has been a shareholder in DTB Kenya since 1983 and holds a 9.85 per cent stake in the bank.
In 2008, IFC provided a Sh2 billion financing package to DTB to support expansion and increase lending to SMEs.
Trade finance
Last year, IFC provided a Sh400 million trade finance guarantee facility to DTB Kenya.
DTB’s other principal shareholders are the Aga Khan Fund for Economic Development (AKFED), the economic development arm of the Aga Khan Development Network and Habib Bank Limited, an AKFED subsidiary.
DTB plans to expand its network in East Africa, from 57 to 70 by year-end and over 100 by 2013. This year, it will have opened 20 new branches.
“Having established a subsidiary in Burundi, in which IFC is a key shareholder, we are exploring the establishment of banking operations in other parts of Eastern and Southern Africa,” Ms Devji said.
