DTB secures Sh7.56bn AfDB credit line for SME lending, boost capital

Diamond Trust Bank (DTB) has secured a $75 million (Sh7.56 billion) loan deal with the African Development Bank (AfDB) at undisclosed interest rates for onward lending to SMEs and boost its capital.

The seven-year credit deal comprises $50 million (Sh5.04 billion) line of credit for onward lending to small and medium-sized enterprises and $25 million (Sh2.52 billion) subordinated loan to boost its tier-two capital.

The credit line largely targets firms in trade, transport, construction and manufacturing sectors in Kenya, Tanzania, Uganda and Burundi where it operates more than 130 outlets.

DTB Group Chief Executive Nasim Devji said large firms will also access loans through the new credit line because their operations have a ripple-effect in supporting smaller businesses.

Economic growth

“This collaboration will enable DTB to entrench its position as a leading business bank in East Africa, helping more local companies grow and compete in the African and global marketplace,” Ms Devji said.

“The funding package will be provided in DTB’s strategy of supporting the economic transformation of Kenya and, by extension, East Africa, making the region’s economy more resilient and diversified.”

Gabriel Negatu, the AfDB director-general for business development and delivery in East Africa, said the funding was in line with the lender’s strategy of growing intra-Africa trade by supporting growth of the private sectors, which is dominated by the SMEs.

“Promoting manufacturing and value-addition in varied sectors is an important part of our strategy to support Africa’s fledgling private sector with a view to enhancing the share of tradable goods,” Mr Negatu said.