International Finance Corporation (IFC) has announced a $50 million loan to Diamond Trust Bank Kenya Limited (DTB) to support its borrowers, especially small and medium enterprises (SMEs), who have been affected by the economic challenges of COVID-19.
The funds, which will be directed to Kenyan businesses across a range of sectors, are being provided under IFC’s global $8 billion fast-track COVID-19 facility. The facility was launched in March to protect jobs and support businesses with working and trade-related capital as economies grapple with the challenges of the pandemic.
Nasim Devji, Group CEO and MD of DTB, said: “As an SME bank, we are aware that these businesses are among the hardest hit by the pandemic. This facility will enable us to help SMEs address their cash flow challenges, which is a key concern as businesses need easy access to short-term liquidity.
“We urge our SME borrowers to take advantage of the facility to ensure their survival during these tough times, as we remain committed to their development.”
Manuel Moses, IFC country manager for Kenya, said: “IFC’s partnership with DTB Kenya is part of our strategy to help businesses in Kenya manage the impacts of COVID-19 so they can continue providing essential goods and services. IFC is committed to helping countries across Africa meet the unique challenges of COVID-19 and also speed the process of recovery.”
In April, Kenya’s Central Bank reported that SMEs had been hard hit by the economic slowdown caused by COVID-19 in part because of their challenges accessing fresh capital.
The World Bank Kenya Economic Update projects that Kenya’s gross domestic product will fall this year due to the negative impacts of COVID-19, underscoring the urgent need to support the country’s smaller businesses.
IFC has earmarked $2 billion of its $8 billion COVID-19 facility to the IFC Working Capital Solutions Program to provide funding to emerging-market banks so they can help businesses shore up their working capital.
The IFC COVID-19 facility supports existing clients in the infrastructure, financial, manufacturing, agriculture, healthcare, and other sectors vulnerable to the pandemic.