NAIROBI, September 10 – The International Finance Corporation (IFC) will invest Sh1.79 billion in Diamond Trust Bank (DTB) to finance expansion and the capacity to lend to small and medium enterprises.
IFC announced Tuesday that it would provide a long-term subordinated loan of Sh1.05 billion to support DTB’s expansion and a 10-year senior-term loan of Sh700 million to promote its lending to smaller businesses.
“This collaboration will enable DTB Kenya to enhance its long-term lending capacity, continue with its expansion plans and explore additional opportunities in other frontier economies in Sub-Saharan Africa,” said DTB Group Chairman Mahmood Manji.
“Small and medium enterprises are one of the most important segments of the East African economies and a key driver for sustained economic growth and prosperity,” he added.
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 banking subsidiary in Burundi and is exploring operations in other African countries, including Rwanda, Madagascar and Mozambique in the next few years.
“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 Africa.”
DTB Kenya has demonstrated success in targeting small and medium enterprises, said Manji, adding that they have been a key area of focus for the bank.
DTB Kenya was named the best SME bank in the country at Kenya’s recent Annual Banking Awards and earlier this month DTB Uganda was voted the Best Bank in customer service by the Kampala City Traders Association, whose membership primarily comprises of Uganda’s SME community.
Manji said: “DTB has increased its capital base significantly during the last three years and is one of the top ten capitalised banks in Kenya.”
IFC has been a shareholder in DTB since 1983 with a 9.85 percent stake.