MICROCAPITAL BRIEF: IFC, FMO Loaning $50m to I&M Bank to Support SMEs in Kenya

The International Finance Corporation (IFC), the private-investment arm of the World Bank Group, along with Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden (FMO), a Dutch public-private partnership, recently announced a loan package of USD 50 million for I&M Bank Limited, which is owned by the Kenya-based I&M Group. The funds are intended to increase access to working capital for small and medium-sized enterprises (SMEs) in Kenya – primarily those active in trade, manufacturing and construction – as they adjust to the COVID-19 pandemic. IFC is providing USD 30 million of the total, while FMO is lending the remainder.

In addition to providing loan funds, IFC and FMO will support the training of I&M Bank staff in “green financing,” such as lending for renewable energy and “climate smart agriculture,” an approach which aims to increase productivity while decreasing emissions and mitigating vulnerability.

“The funding line from IFC and FMO is most welcome and will enable I&M Bank to provide cash flow support to small businesses whose operations have been affected by COVID-19 measures and the pandemic in general,” said I&M Bank CEO Kihara Maina. “We believe that this funding line will help our… customers accelerate their business growth and support their expansion efforts while cushioning them from the ramifications of the COVID-19 pandemic.”

Founded as a community financial institution in 1974, I&M Bank transformed into a commercial bank in 1996. As of March 2021, it reported assets valued at KES 280 billion (USD 2.5 billion).

I&M Group is listed on the Nairobi Securities Exchange and has additional holdings in Mauritius, Rwanda, Tanzania and Uganda. As of March 2021, the group reported total assets of KES 300 billion (USD 2.8 billion).

IFC 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. During the 2020 fiscal year, IFC reported disbursements of USD 26 billion, closing the period with total assets of USD 96 billion.

Established in 1970, FMO is 51-percent held by the Dutch government and 49-percent by private investors. The institution works towards the UN’s Sustainable Development Goals by funding capacity development and placing debt and equity investments in sectors such as agribusiness, financial institutions and energy. For the first half of 2021, FMO reported a net profit of EUR 200 million (USD 230 million) on a portfolio valued at EUR 12 billion (USD 14 billion).

By Divya Deshmukh, Research Associate

Sources and Additional Resources

IFC press release
https://pressroom.ifc.org/all/pages/PressDetail.aspx?ID=26575

FMO press release
https://www.fmo.nl/news-detail/dee18cf4-969c-4965-82a9-95e4697a4372/ifc-and-fmo-partner-with-i-m-bank-ltd-to-support-small-and-medium-sized-businesses-in-kenya

I&M Bank homepage
https://www.imbank.com/

I&M Bank quarterly report
https://www.imbank.com/storage/uploads/2021/05/31/60b4b9571cbabI-M-bank-Ltd-Publication-financials-Mar-2021.pdf

World Bank Group homepage
https://www.worldbank.org/en/home

Did you know that MicroCapital publishes the MicroCapital Monitor newspaper each month? Find out more at
https://www.microcapital.org/products-page/.