WASHINGTON, D.C., January 13, 1999 --- The International Finance Corporation has approved a loan of US$30 million to Kenya Commercial Bank (KCB), as part of a project that will channel foreign exchange resources to the Kenyan private sector at a time when such financing is not readily available.
The project involves onlending by KCB to export-oriented small and medium enterprises (SMEs), which will use the funding to rehabilitate, restructure, and expand investments in the agribusiness, manufacturing and tourism sectors. In addition, IFC's involvement is expected to strengthen KCB's management information systems as well as its operating policies and procedures by promoting best practices and good governance in the banking sector.
KCB, Kenya's oldest and largest financial institution, is the leading provider of long-term finance to SMEs. It is listed on the Nairobi Stock Exchange with 65 percent of its shareholding held by more than 100,000 shareholders in the general public. The rest of the shares are held by the government of Kenya, which has reduced its shareholding in the past five years from 80 to 35 percent, as part of its economic reform and privatization program.
Mr. Cesare Calari, Director of IFC's Africa Department, said the project would provide institutional support to KCB in its critical post-privatization phase.
IFC extended a successful SME agency credit line to KCB in 1978, that was used as a pilot for similar projects worldwide.
IFC, part of the World Bank Group, encourages economic growth in the developing world by financing private sector investments, mobilizing capital in the international financial markets, and providing technical assistance and advice to governments and businesses.
