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IFC Invests in Co-op Bank to Support Entrepreneurs and Housing Finance in Kenya


In Nairobi
Neha Sud

Phone: +254-20-293-7403

E-mail:
NSud@ifc.org

In Washington, DC:

John McNally

Phone: (202) 458-0723

E-mail:
Jmcnally@ifc.org


Nairobi, Kenya, January 11, 2016— IFC, a member of the World Bank Group, announced today that it will provide a $105 million loan to the Co-operative Bank of Kenya (Co-op Bank) to support lending to small and medium businesses, women entrepreneurs and the housing sector.

The second largest bank in Kenya by total assets, Co-op Bank has 143 branches across the country and a subsidiary in South Sudan. Small and medium enterprises account for eighteen percent of the Bank’s lending, or close to $386 million as of June 30, 2015. Co-op bank will use IFC’s financing to extend a wider range of financial services to entrepreneurs, with $30 million earmarked for women-owned businesses.


IFC estimates that close to 40 percent of Kenya’s SMEs are owned by women, who often have more barriers to gaining access finance than their male counterparts. Alongside the investment, IFC will advise Co-op Bank on how to tailor products to the needs of women entrepreneurs. Through IFC’s Banking on Women program, this project is supported by the Women Entrepreneurs Opportunity Facility, the first-of-its-kind global facility dedicated to expanding access to capital for women entrepreneurs, launched by IFC and Goldman Sachs’ 10,000 Women initiative in 2014.


The loan will enable Coop Bank to promote affordable housing in Kenya by expanding its mortgage lending and construction finance. Rapid urbanization has led to a housing shortage of 2.0 million units in Kenya, which will require private investment to build. With only 25,000 loans outstanding in a country of more than 10 million households, the mortgage market is underdeveloped. IFC will work with Coop Bank to streamline mortgage lending and support affordable housing projects.  


Dr. Gideon Muriuki, CEO of Co-op Bank said, “The IFC funding comes at a most appropriate time in view of the critical need to support the growth in the economy. The long-term tenure of the facility boosts Co-op Bank’s ability to offer financing solutions that are better structured and priced to fulfil the long-term financing needs of customers.”


Oumar Seydi, IFC Director for East and Southern Africa, said, " Small and medium enterprises make up more than 95 percent of all firms in Africa, and are generating millions of jobs on the continent. IFC works with local financial institutions like Co-op Bank to provide innovative and specialized services to entrepreneurs, helping them grow their businesses and drive African economies.”


IFC’s new investment in Co-op Bank continues a relationship that began in 2012, when IFC invested $60 million to expand the bank’s SME portfolio and support the agribusiness sector. The current $105 million loan was mobilized in partnership with IFC’s Managed Co-Lending Portfolio Program, a new syndications platform that allows investors to passively participate in IFC’s future loan portfolio. The investment marks IFC’s first syndication under the program in Kenya.


IFC has partnered with ten banks in Kenya to support entrepreneurs and small business growth. During the last fiscal year, IFC’s work with financial institutions helped provide loans to two million entrepreneurs in Africa.



About IFC

IFC, a member of the World Bank Group, is the largest global development institution focused on the private sector in emerging markets. Working with more than 2,000 businesses worldwide, we use our capital, expertise, and influence, to create opportunity where it’s needed most. In FY15, our long-term investments in developing countries rose to nearly $18 billion, helping the private sector play an essential role in the global effort to end extreme poverty and boost shared prosperity. For more information, visit
www.ifc.org

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About Goldman Sachs 10,000 Women

The Goldman Sachs 10,000 Women initiative is a campaign to foster economic growth by providing women entrepreneurs around the world with a business and management education and access to capital. The initiative has reached women from across 56 countries through a network of 100 academic, nonprofit, and bank partners. In Kenya, over 300 women entrepreneurs have graduated from 10,000 Women. In partnership with International Finance Corporation (IFC), 10,000 Women launched a $600 million finance facility in 2014 to enable 100,000 women entrepreneurs to access capital. The Goldman Sachs 10,000 Women/ IFC Women Entrepreneurs Opportunity Facility aims to help close an estimated $285 billion credit gap for women-owned SMEs around the world. To date, the facility has completed 19 investment and advisory engagements totaling $333 million in 13 emerging economies