Sh1.7bn loan to boost DTB capital base, SME lending

What you need to know:

  • It is the second time in as many years that DTB has approached IFC for credit in a growing trend that has seen several local banks increase borrowing from the lender in the recent past.
  • Last year, the bank acquired a similar loan of Sh4.2 billion from the World Bank subsidiary to expand its lending activities to small and medium sized enterprises.
  • DTB is based in Nairobi and has a network of 51 branches across the country. It has 20 branches in Tanzania, 29 in Uganda and four Burundi, bringing the group’s total network size across East Africa to 104 branches.

Diamond Trust Bank has secured a Sh1.76 billion loan from the International Finance Corporation to strengthen its capital and increase lending to small and medium enterprises.

The private sector lending arm of the World Bank said the money would help DTB meet higher capital adequacy requirements that have been introduced by the Central Bank of Kenya as well as fund the bank’s expansion.

“The proposed project entails an IFC investment of $20 million, in the form of a subordinated loan that qualifies as Tier II Capital, to be extended to Diamond Trust Bank Ltd (DTBK).

The above facility will be utilised to strengthen the bank’s capital base; and help the bank to expand its lending activities to SMEs,” IFC said in a statement on its website.

GROWING TREND

It is the second time in as many years that DTB has approached IFC for credit in a growing trend that has seen several local banks increase borrowing from the lender in the recent past.

Last year, the bank acquired a similar loan of Sh4.2 billion from the World Bank subsidiary to expand its lending activities to small and medium sized enterprises.

DTB is based in Nairobi and has a network of 51 branches across the country. It has 20 branches in Tanzania, 29 in Uganda and four Burundi, bringing the group’s total network size across East Africa to 104 branches.

Strong performance in the Uganda and Tanzania subsidiaries boosted DTB’s net profit for the first half of the year to Sh2.94 billion — 10 per cent higher than a similar period last year.

Other banks that have recently acquired credit from IFC include NIC, Kenya Commercial Bank, Equity and Co-operative Bank.