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
“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
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.
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.