Guaranty Trust Bank (Kenya) Limited, a subsidiary of the Guaranty Trust Group, has received a $15 million loan from the International Finance Corporation (IFC) for on-lending to local firms in Kenya.
Small and medium-sized firms (SMEs) in the trade, consumer goods, pharmaceuticals, and manufacturing sectors, among others, would benefit from GTBank Kenya’s access to funding, which will help them retain and create jobs, as well as strengthen their operations.
GTBank Kenya received a $15 million loan from the IFC as part of the $8 billion IFC Fast Track Covid-19 Facility, which will be released in 2020. The facility is intended to assist existing IFC clients in emerging markets affected by Covid-19’s economic consequences.
“The IFC loan will help the Bank satisfy the working capital and trade-related demands of businesses, especially SMEs that are part of our core clientele,” said Olabayo Veracruz, managing director of GTBank Kenya”.
“These businesses were adversely affected by the pandemic and are now recovering and reviving as the economy opens up, therefore requiring the support of the Bank through access to credit”.
Veracruz stated that “we hope to on-lend the facility to customers in the trade, FMCG, manufacturing, and pharmaceutical sectors primarily to fund working capital needs over the next year.”
Amena Arif, the IFC’s Kenya country manager, remarked: “IFC is committed to supporting Kenya’s private sector, including strengthening its financial sector to help the country’s smaller businesses to access more financing.
Our partnership with GTBank Kenya will deliver funds to businesses, allowing them to emerge stronger from the COVID-19 crisis”.
Kenya’s real GDP contracted in 2020 as a result of pandemic-related interruptions, with supply chain delays and lower economic activity wreaking havoc on the country’s smaller firms.
Although Kenya’s growth rate restored to pre-pandemic levels in 2021, the year 2022 is proving to be difficult, and small enterprises will require further assistance to weather the current storm.
Kenya’s long-term economic growth is a priority for the IFC. As of June 30, 2021, the IFC’s investment portfolio in Kenya was $940.1 million, with the majority of investments in the finance, manufacturing, agribusiness, and services sectors.