Nairobi, September 9, 2008—
IFC, a member of the
World Bank Group, will invest in Diamond Trust Bank Kenya to support its expansion and enable DTB to increase lending to small and medium enterprises, the two organizations announced today.
IFC will provide $25 million (1.79 billion Kenyan shillings) to DTB, including a $15 million (1.05 billion shillings) long-term subordinated loan and a $10 million (700 million shillings), 10-year senior-term loan. IFC is also providing advisory services that will help the bank expand its range of products and services, enhance risk-management practices, and increase outreach to small and medium enterprises. The deal is part of a broader agreement under which IFC also expects to support the bank’s trade finance activities.
“This collaboration will enable us to enhance our long-term lending capacity, continue with our expansion plans, and explore additional opportunities in other frontier economies in Sub-Saharan Africa,” said Mahmood Manji, the bank’s chairman. “Small and medium enterprises are among the most important segments of East African economies and a key driver of sustainable economic growth and prosperity.”
DTB plans to open 12 new branches in East Africa by the end of the year, extending its branch network to 35 in the region. It also plans to open a new subsidiary in Burundi and is exploring establishing operations in other African countries, including Madagascar, Mozambique, and Rwanda.
“Limited access to finance is a key constraint to private sector growth in Africa, especially for smaller firms that have minimal influence on policy reform,” said Jean Philippe Prosper, IFC Director for Eastern and Southern Africa. “Supporting the growth of smaller businesses and enabling them to contribute more fully to economic development is one of IFC’s strategic priorities in the region.”
DTB has demonstrated success focusing on small and medium enterprises. The bank was named the best SME bank in the country at a recent annual banking awards ceremony. Earlier this month, a subsidiary, DTB Uganda, was voted the Best Bank in Customer Service by the Kampala City Traders Association, whose membership comprises mainly Uganda’s SME community.
DTB has increased its capital base significantly during the last three years and is one of the 10 best-capitalized banks in Kenya.
IFC has been a shareholder in DTB since 1983 and currently holds a 9.85 percent stake.
About IFC
IFC, a member of the World Bank Group, fosters sustainable economic growth in developing countries by financing private sector investment, mobilizing private capital in local and international financial markets, and providing advisory and risk mitigation services to businesses and governments. IFC’s vision is that poor people should have the opportunity to escape poverty and improve their lives. In FY07, IFC committed $8.2 billion and mobilized an additional $3.9 billion through syndications and structured finance for 299 investments in 69 developing countries. IFC also provided advisory services in 97 countries. 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. The bank's other key shareholders are Habib Bank Limited, an AKFED subsidiary; and IFC, a member of the World Bank.
