The International Finance Corporation (IFC) is set to invest $100million in Diamond Trust Bank (DTB) to support businesses impacted by the Covid-19 pandemic in East Africa.
The IFC disclosed that the investment will be in form of senior debt under its Covid-19 emergency response working capital solutions scheme (WCS FIGE).
“IFC will invest up to $100 million in Diamond Trust Bank in the form of senior debt investment”, IFC said.
The WCS FIGE is designed to provide funding to existing IFC client banks in emerging markets that will, in turn, extend trade or working capital facilities to support the financing needs of companies in countries affected by the coronavirus pandemic to maintain trade flows, stabilize the economy, support employment, and restore supplies of key goods and services.
The loan will mature in 24 months, but there is an option to renew it once for a total of 36 months.
Small and medium enterprises (SMEs) are a major clientele group for DTB, which serves 317,000 customers in Kenya and more than 626,000 in East Africa, according to the IFC.
Firms that are expected to benefit from DTB’s onward lending are those fitting the criteria set by IFC, such as having between 10 and 300 employees or annual sales of $100,000 to $15 million.
The IFC said the facility to DTB will target Small and Medium Enterprise (SME) borrowers.