Bank One is set to receive a $37.5 million loan from IFC to increase lending to small businesses.
The debt is classified as a senior loan, meaning it ranks higher than other Bank One’s obligations with regards to claims on the bank’s assets.
The loan deepens IFC’s lending to banks for onward funding of SMEs, women-owned businesses and climate-related projects.
Mauritius-based Bank One, in which Kenyan banking group I&M Holdings #ticker:I&M has a 50 percent stake, is set to receive a $37.5 million (Sh3.75 billion) loan from International Finance Corporation (IFC) to increase lending to small businesses.
The debt is classified as a senior loan, meaning it ranks higher than other Bank One’s obligations with regards to claims on the bank’s assets.
“The IFC loan will strengthen the bank’s long-term funding position and support the expansion of its lending operations to SMEs,” the IFC said in its investment disclosures.
Bank One is a joint venture between I&M and CIEL Group, which is based in Mauritius. Its indirect owners also include the family company Minard Holdings via I&M, and the investment group Amethis Finance via CIEL.
The loan deepens IFC’s lending to banks for onward funding of SMEs, women-owned businesses and climate-related projects.
Firms that are expected to benefit from Bank One’s onward lending of the IFC loan are those fitting the set criteria such as having between 10 and 300 employees or annual sales of Sh10 million to Sh1.5 billion.
Access to finance remains a major constraint for many SMEs, with many banks opting to lend to well-established firms presumed to be less risky.
Local and regional banks are increasingly taking substantial loans from global funds such as the IFC, European Investment Bank and Agence Française de Développement, attracted by relatively more favourable terms of the debt including lower interest rate and longer maturity.
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