Nairobi, Kenya, July 20, 2009—
IFC, a member of the World Bank Group, announced today it will invest in Faulu Kenya to help the microfinance institution broaden its products and services to reach more Kenyans, helping build a more inclusive financial sector and contributing to the development of a vibrant private sector.
In May 2009, Faulu became the first microfinance institution in Kenya to receive a license from the Central Bank of Kenya to accept deposits. IFC will provide a partial credit guarantee for 80 percent of a 450 million Kenyan shilling loan from Standard Chartered Bank to Faulu. IFC will also provide advisory support to facilitate Faulu’s transformation to a deposit taking institution.
“Our partnership with IFC will enable Faulu to offer a wider range of products and services that better meet the needs of Kenya’s micro and small entrepreneurs,” said Lydia Koros, Managing Director of Faulu Kenya “IFC’s global expertise in microfinance will support Faulu as we apply best practices to offer financial services to people who need them the most.”
Limited access to finance is a key constraint to private sector growth in Africa. Only about one in five Kenyans has a formal relationship with a financial institution, severely hampering the ability of small businesses to access finance, according to the Finaccess 2009 study by the Financial Sector Deepening Trust, an independent trust to support the development of financial markets in Kenya.
“Promoting a strong financial system is essential for sustainable economic development and an important part of IFC’s effort to reduce poverty and improve people's lives,” said Dorothy Berry, IFC Vice President for Human Resources, Communications, and Administration. “Microfinance is a central part of IFC’s strategy to support the development of a vibrant private sector in Africa.”
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