IFC commits $15 million to Cushions SME’s

The International Finance Corporation (IFC) is set to lend $15 million (Sh1.6 billion) to Guaranty Trust Bank Kenya for onward lending to Small and Medium sized Enterprises (SMEs). The loan is part of IFC’s funding of financial institutions in emerging markets under its COVID-19 crisis response programme.

The loans are designed to be disbursed to companies whose cash flows have been disrupted by the pandemic, helping to boost their working capital among other needs.

The IFC defines SMEs using various measures including firms having between 10 and 300 employees or annual sales of between KSh11 million and KSh1.6 billion. The loan size per borrower usually ranges from KSh1.1 million to KSh221 million. The loan will thus provide working capital and trade-related loans to borrowers, stabilising supply chains and re-enforcing resilience in critical sectors such as trade, fast moving consumer goods, pharmaceuticals and manufacturing, that the pandemic has impacted.

The IFC further says the proposed KSh1.6 billion loan is a one-year loan, with the option to be rolled over for an additional year at its discretion.

In August this year, IFC also partnered with FMO, a Dutch development bank, to assist small businesses in Kenya by providing funds for working capital, expansion, and to weather the COVID-19 crisis. IFC contributed $3