This archive report was first published on 29 June 2020.
On June 29, 2020, Equity Bank Kenya announced that it had received a Sh. 5.3 billion loan from the World Bank's private lending arm, International Finance Corporation (IFC). The loan is aimed at supporting small and medium enterprises (SMEs) in Kenya, particularly those whose cash flows have been disrupted by the COVID-19 pandemic.
According to the IFC, the loan is a senior loan of up to $50 million with a tenor of one year, renewable. The investment will help expand Equity Bank's lending operations to the SMEs segment in Kenya, enabling the bank to advance new loans to more customers.
Equity Bank currently channels about 65 percent of its loan book to SMEs in Kenya. The bank's decision to take the loan comes at a time when it has been affected by growing bad loans, which rose from Sh. 29.3 billion to Sh. 44.6 billion in the period ended March 31, 2020.
Equity Bank's net profit declined by 14 percent to Sh. 5.2 billion in the period ended March 31, 2020, compared to Sh. 6.1 billion in a similar period last year. The bank's management had previously announced the withdrawal of dividend in May this year, the first time the country's second-largest bank by assets had skipped dividends since listing on the Nairobi Securities Exchange (NSE) in August 2006.
