The bank’s Managing Director Gideon Muriuki said the loan which has a tenure of seven years will also be used to support agriculture projects/FILE
The bank’s Managing Director Gideon Muriuki said the loan which has a tenure of seven years will also be used to support agriculture projects.
“What we have signed today is not a grant but a loan that we have to pay back in seven years. Our first consideration as we give this money to customers is not where they come from but their ability to pay back. Because by the time I am to pay the facility back to IFC I have to make sure the customers have paid,” Muriuki said during the signing ceremony.
The bank will however give the loans to customers in dollars only targeting those who get their income in foreign currencies so as to hedge on the foreign exchange risks.
The bank recently received Sh7.5 billion fund from European Investment Bank (EIB) to support the SMEs.
Oumar Seydi who is the new IFC director for East and Southern Africa called on the bank not to put stringent measures while extending the loans to the SMEs as it has been the biggest challenge for credit access.
“Our aim is to grow businesses and reduce poverty through the private sector. We provide our instruments based on market rates and we trust our partners in how they run their operations,” Seydi said.
The banks net loan book in quarter three 2012 increased by 11.3 percent to Sh118.4 billion from Sh106.4 billion in the same period.
Meanwhile Muriuki said the bank has just finalised its joint venture of its subsidiary in South Sudan where the latter’s government will holds 49 percent stake with the bank holding 51 percent.
The government of South Sudan will hold the stake in trust for three years before handing it over to the co-operative movement that is being developed in that market.
“I know there has been foreign exchange issue in South Sudan but we are not going there like any other. We will operate from there only. I also believe when we start business there things will be alright,” said Muriuki.
This will be the bank’s first investment outside the country.
