The International Finance Corporation has granted a loan facility of $171. 2 million to help Bank of Africa expand lending to MSMEs. PHOTO | DENNIS ONSONGO | NMG
Bank of Africa Kenya is set to benefit from a $171.2 million (Sh27 billion) funding extended by the International Finance Corporation (IFC) to its Casablanca-based parent firm.
The funding is meant to help BOA Kenya and its affiliates increase their lending to small and medium-sized enterprises.
“The proposed project is a multi-currency facility in the aggregate amount of up to $171.2 million to nine Bank of Africa (BOA) affiliates in IDA and FCS countries —namely Bank of Africa Benin, Bank of Africa Burkina Faso, Bank of Africa Cote d’Ivoire, Bank of Africa Kenya, Bank of Africa Mali, Bank of Africa Niger, Bank of Africa Senegal, Bank of Africa Togo, and Bank of Africa Uganda,” IFC said in its investment disclosures.
“The facility will support the Group in scaling up its lending to micro, small, and medium enterprises (“MSMEs”) in the context of high interest rates which led to tightening liquidity in the region,” IFC added.
The global financier seeks to promote better competitiveness in the MSME finance market by demonstrating the commercial viability of lending to MSMEs and women-owned or led small, and medium enterprises.
According to IFC, MSMEs are firms with employees below 10 to 300 and assets ranging from under $100,000 to $15 million. The institution also places their sales from below $100,000 to $15 million. The loan size per borrower usually ranges from less than $10,000 to $2 million according to IFC definition. Through the facility, BOA Kenya is expected to increase new loans to SMEs and women-owned businesses, which often face greater barriers to accessing funding.
BOA Kenya's loan book stood at Sh17.3 billion in the nine months ended September 2023, down from Sh18.3 billion a year earlier.
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