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Washington D.C., December 21, 2004—
The International Finance Corporation, the private sector arm of the World Bank Group, and K-Rep Development Agency (“KDA”) signed today an agreement worth a grant worth $25,000 and a loan for $100,000. The funds will support the expansion and development of a microleasing and small loan facility and the upgrading of KDA’s management information system and monitoring and evaluation system.
KDA is a microfinance research and development arm of the K-Rep group in Kenya. Its focus is on expanding access to financial services for low-income Kenyans who traditionally have not been fully reached by formal financial institutions. KDA has tested and developed innovative financial products and mechanisms for improving the accessibility of financial services. Since 2003, kt has piloted a microleasing scheme for beehives, which enables low-income people to acquire productive assets and engage in income-generating activities.
The project is expected to yield considerable financial, social, and economic benefits as it strengthens KDA’s management capabilities in microleasing through technical assistance in credit evaluation, portfolio risk management, and monitoring capabilities. The project will enable KDA to broaden outreach to the rural poor in Kenya, thus helping alleviate poverty. The loan facility will be expected to reach, among others, beneficiaries of organizations supported by the IFC’s Strengthening Grassroots Business Organizations Initiative.
KDA intends to support leases for beehives and foot pedal water pumps, as well as small working capital loans for medicines at innovative medical franchise operations in Kenya. Local communities will benefit from increased income and improved livelihoods. The microleasing project with KDA is part of IFC’s strategy to promote leasing a new financial product in Sub-Saharan Africa.
Strengthening Grassroots Business Initiative
Jointly with the World Bank, IFC has launched a new initiative to support efforts by poor, marginalized people to expand revenue-generating activities that bring them into the market economy. This initiative can provide technical assistance or patient capital investments to strengthen organizations' access to markets, management capacity, and capital structure. Recipients can be not-for-profit or for-profit. The initial focus is to provide direct support to pilot projects in Africa, Asia, and Latin America. The initiative will also seek effective ways to reach a wide range of grassroots businesses and promote a wholesale approach to supporting this sector. For more information, please visit
www.ifc.org/gbo
The mission of IFC (
www.ifc.org
) is to promote sustainable private sector investment in developing countries, helping to reduce poverty and improve people’s lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, helps clients improve social and environmental sustainability, and provides technical assistance and advice to governments and businesses. From its founding in 1956 through FY04, IFC has committed more than $44 billion of its own funds and arranged $23 billion in syndications for 3,143 companies in 140 developing countries. IFC’s worldwide committed portfolio as of FY04 was $17.9 billion for its own account and $5.5 billion held for participants in loan syndications.
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