Nairobi, March 28th, 2013—IFC,
a member of the World Bank Group, today announced the investment of $5
million equity in Gulf African Bank to support
corporate finance and lending to small and medium businesses in East Africa.
The investment in Gulf African Bank marks IFC’s first engagement
with an Islamic finance institution in Sub-Saharan Africa.
Gulf African Bank, one of Kenya’s only two
Islamic banks, has fourteen branches in Kenya, offering a range of Sharia-compliant
banking products and services. The bank will use IFC’s financing to increase
finance for retail and corporate customers, develop programs for women
entrepreneurs and extend more services to small and medium businesses.
Jamal Al Hazeem, Chairman of Gulf African
Bank, said, “We are delighted by IFC’s decision to take up a 15% shareholding
stake in Gulf African Bank. This is a clear indication of their belief
not only in our Bank’s future but the future of Islamic Banking in the
region. In addition to the IFC partnership, the Bank is undertaking a rights
issue simultaneously to increase its capital base by an additional Kshs
850M. We feel priviledged that this is the first investment by IFC in an
Islamic financial Institution in Sub_saharan Africa. IFC’s involvement
will open up more opportunties for Gulf African Bank’s growth and expansion
and enhance our processes.’’
Gulf African Bank, which was established
in 2007, has in the past five years greatly raised awareness in Kenya about
Islamic banking. The bank’s shareholders are institutional investors from
the Middle East and North Africa.
Oumar Seydi, IFC Director for East and Southern
Africa, said, “IFC is committed to helping expand access to financial
services in Africa. In Kenya, new financial market segments like Islamic
banks enhance competition and can help reach a greater number of small
businesses and women entrepreneurs, who are often excluded from banking
services. IFC looks forward to working with Gulf African Bank to
extend services and offer clients a more diverse range of financial products.”
In addition to the equity investment, a further
$3 million trade line will be made available to Gulf African Bank under
IFC’s Global Trade Finance Program. The Program complements the capacity
of banks to deliver trade financing by mitigating risk in new or challenging
markets where trade lines may be constrained.
To date, IFC’s investment and advisory services
have partnered with 11 banks and one microfinance institution in Kenya,
to help them sustainably increase business with small and medium enterprises.
IFC, a member of the World Bank Group, is the largest global development
institution focused exclusively on the private sector. We help developing
countries achieve sustainable growth by financing investment, mobilizing
capital in international financial markets, and providing advisory services
to businesses and governments. In FY12, our investments reached an all-time
high of more than $20 billion, leveraging the power of the private sector
to create jobs, spark innovation, and tackle the world’s most pressing
development challenges. For more information, visit www.ifc.org