The International Finance Corporation (IFC), a member of the World Bank Group, has given a KSh8.25 billion loan to Co-operative Bank, to enable the bank to increase lending to Micro, Small and Medium-sized Enterprises (MSMEs) at affordable terms.
The loan is part of the global $8 billion COVID-19 facility, unveiled in March 2020 to help businesses in the world to stay in operation and maintain jobs during and after the COVID-19 crisis.
The long-term loan has a tenure of 7 years, coming in as a tier two supplementary capital and would target startups in sustainable agriculture and renewable energy. Co-operative Bank will apply the facility’s proceeds to support customers to better cope with the disruptions brought about by COVID-19 pandemic.
The funds will ensure qualified MSMEs not only survive the pandemic but also remain operational and viable for the long term, enhance the bank’s assets and liability match with long-term loans to customers, diversify the bank’s asset and funding portfolio by increasing long-term funding to support deposits funding and boost the bank’s competitive position on account of affordable lending.
IFC has earmarked $2 billion of its $8 billion COVID-19 facility to the IFC Working Capital Solutions Program to provide funding to banks in emerging-markets so that they can support businesses shore up their working capital.