Economy set for Sh8.6bn boost

The Kenyan economy is set for a boost with the planned injection of Sh8.6 billion ($103.7 million) by the International Finance Corporation (IFC) in various projects this year.

This will bring the total local investment by the World Bank Group-owned corporation to Sh33.2 billion, up from the current Sh24.5 billion as it increases its local investment portfolio.

“IFC’s strategy for Africa is to promote economic growth especially in key sectors such as infrastructure, SMEs and agribusiness. We are looking to increase our investments to help mobilise resources for people and projects that contribute to Kenya’s sustainable development,” said Aida Kimemia, principal investment officer at IFC, in an interview with the Nation.

The corporation invests by way of equity. It is not clear what its equity will be in the planned investment but currently of the total investment in Kenya, IFC has an equity share of about 16 per cent.

Last year, it injected Sh13.7 billion into the local financial sector aimed at increasing lending to SMEs and aid bank expansion projects to cover the region.

Other beneficiaries

This included a Sh8.3 billion loan to Kenya Commercial Bank to enhance the bank’s ability to meet demand for long-term loan facilities and expand its mortgage book.

Other beneficiaries were Bank of Africa, which secured a Sh664 million subordinated loan and Sh415 million trade finance facility in August 2010.

Diamond Trust Bank secured a Sh1.6 billion loan to aid the bank’s expansion strategy to new market segments, including mortgage financing and Barclays Bank and Prime bank benefited from a Sh3.07 billion loan in support of trade finance facilities.

Currently, IFC’s investment portfolio in East Africa amounts to Sh68.6 billion.