Nairobi, February 13, 2009—
IFC, a member of the
World Bank Group, has entered into a US$5 million (395 million Kenyan shillings) trade financing guarantee agreement with Diamond Trust Bank Kenya (DTB) to help boost Kenya’s share of global trade, the two organizations announced today.
IFC’s guarantee will enable DTB to increase the trade finance instruments it issues to finance imports to Kenya, which will support the country’s private sector and promote economic development.
“This collaboration will enable DTB Kenya to increase its trade finance activities, helping more local companies grow and compete in the international marketplace,” said DTB Group Chairman Mahmood Manji.
IFC’s global trade finance program promotes trade with emerging markets worldwide by supporting flows of goods and services to and from developing countries. Through the program, IFC provides guarantee coverage of bank risk in emerging markets, allowing recipients to expand their trade finance transactions within an extensive network of countries and banks and to enhance their trade finance coverage.
“Increased trade in Africa is important to supporting the region's continued economic growth and development," said IFC Executive Vice President and CEO Lars Thunell. “Promoting trade is an important part of IFC's strategy to support the private sector amid the current global economic and financial turmoil,” Thunell added.
This is the second time in less than a year that IFC has partnered with DTB Kenya. Last year, IFC made available a 2 billion Kenyan shilling (Ksh) financing package to DTB to support the bank’s expansion plans and to help it increase lending to small and medium enterprises.
DTB plans to increase its branch network from the current 30 to 100 in the next three years. This year alone, the group plans to open nearly 20 new branches in the region.
DTB Uganda also plans to increase its domestic network during 2009, and began branching out outside the capital, Kampala, in 2008.
“We will also be establishing a new banking subsidiary in Burundi in the next two months or so, and we are exploring the establishment of banking operations in other parts of Eastern and Southern Africa over the next three to four years including Madagascar, Mozambique, DRC and Rwanda,” said Manji.
IFC has been a shareholder in DTB since 1983 and currently holds a 9.85 percent stake in the bank.
About IFC
IFC, a member of the World Bank Group, creates opportunity for people to escape poverty and improve their lives. We foster sustainable economic growth in developing countries by supporting private sector development, mobilizing private capital, and providing advisory and risk mitigation services to businesses and governments. Our new investments totaled $16.2 billion in fiscal 2008, a 34 percent increase over the previous year. For more information, visit
www.ifc.org
.
About DTB
DTB Kenya is an affiliate of the Aga Khan Fund for Economic Development (AKFED), the economic development arm of the Aga Khan Development Network. Amongst the bank's key shareholders are Habib Bank Limited (HBL), an AKFED subsidiary, and the International Finance Corporation, the private sector lending arm of the World Bank.
