MICROCAPITAL BRIEF: Gulf African Bank of Kenya to Receive Advisory Services Under International Finance Corporation’s Africa Micro, Small, and Medium Enterprise Finance Program

The International Finance Corporation, the private-investment arm of the US-based World Bank Group, has announced that the Gulf African Bank (GAB), which offers Shariah-compliant products and services in Kenya, has become a member of its Africa Micro, Small, and Medium Enterprise Finance Program. Through this program, GAB will receive advisory services from IFC in the areas of accessibility for customers, speed of service, adding new products and customer relationships. According to the principles of Islamic law, or Shariah, Islamic finance does not allow charging interest on loans, instead relying on the sharing of profit and loss.

Oumar Seydi, IFC Director for East and Southern Africa, stated, “IFC is confident that Islamic finance products will reach many businesses that would otherwise be excluded from banking”[1].

In 2013, IFC paid USD 5 million for a stake of undisclosed size in GAB. As of December 2013, GAB had total assets of KES 16 billion (USD 184 million). IFC has 182 member countries and reported total assets of USD 77.5 billion.

By Juan Blanco, Research Associate

About International Finance Corporation (IFC)

The International Finance Corporation (IFC), a US-based multilateral development bank and member of the World Bank Group, offers loans, equity investments, advisory services and technical assistance to private companies with the intent of alleviating poverty and promoting open and competitive markets in developing countries. The IFC has 184 member countries and reported total assets of USD 77.5 billion as of fiscal year-end 2013.

Sources and Additional Resources

[1] International Finance Corporation, “IFC Expands Partnership with Gulf African Bank to Support Islamic Finance and Entrepreneurs in Kenya,” April 2014, http://ifcext.ifc.org/ifcext/pressroom/IFCPressRoom.nsf/0/E9B2D424778EC5B785257CC9003A6CCF

MicroCapital Story, April 23, 2014, “Cooperative Rural Development Bank (CRDB) of Tanzania, International Finance Corporation (IFC) Sign $75m Agreement to Support Small, Medium-Sized Businesses Including Those Owned by Women, Involved in Agriculture,” https://www.microcapital.org/microcapital-brief-cooperative-rural-development-bank-crdb-of-tanzania-international-finance-corporation-ifc-sign-75m-agreement-to-support-small-medium-sized-businesses-including-those-owned-b/

MicroCapital Story, April 16, 2014, “International Finance Corporation (IFC) Commits Support Worth $300k to Back Newly Licensed AB Bank Rwanda, 8th Member of Access Microfinance Holding,” https://www.microcapital.org/microcapital-brief-international-finance-corporation-ifc-commits-support-worth-300k-to-back-newly-licensed-ab-bank-rwanda-8th-member-of-access-microfinance-holding/

MicroCapital Story, May 29, 2013, “Kenya-based Gulf African Bank, African Guarantee Fund Partner to Lend $1.2m to Small, Medium-Sized Businesses,” https://www.microcapital.org/microcapital-brief-kenya-based-gulf-african-bank-african-guarantee-fund-partner-to-lend-1-2m-to-small-medium-sized-businesses/

MicroCapital Universe Profile, International Finance Corporation (IFC), https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=International+Finance+Corporation+%28IFC%29

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