James Mwangi’s Equity Bank secures $165-million credit facility from IFC days after buy-in

Equity Bank Kenya Limited, a subsidiary of the James Mwangi-led Equity Group Holdings Limited, has secured a Ksh21.1-billion ($165 million) credit facility from the International Finance Corporation to enhance its regulatory capital requirements and support its lending operations to climate-smart projects and small and medium enterprises in Kenya.

The credit facility is a seven-year Tier-2, Basel II-compliant subordinated loan.

According to information gathered by Billionaires.Africa, the IFC is expected to provide about 30 percent of the credit amount, translating to $50 million (Ksh6.4 billion), while the balance of $115 million (Ksh14.7 billion) will come from its partners.

The development comes days after the IFC, a member of the World Bank Group, reached an agreement to acquire an additional 253 million shares in Equity Group Holdings from Britam Holdings at a price of Ksh55 ($0.486) per share.

The breakdown of the deal revealed that the IFC agreed to directly acquire 164.5 million shares of the Kenyan bank and another 88.5 million shares through its Financial Institutions Growth Fund LP.

If ratified by the relevant regulatory bodies, the deal will make the IFC the second-largest shareholder in the lender behind Arise B.V., which owns an 11.99-percent stake in the bank.

In this light, the recent announcement signals growing commercial ties between the parties and might be an indication that the IFC strongly believes in the lender’s future growth prospects.

Equity Bank is headquartered in Nairobi, Kenya, and listed on the Kenyan Stock Exchange. As of September 2021, the bank had $7.2 billion in assets. It is regarded as the second-largest bank in Kenya, with more than 10.7 million customers.

Billionaires.Africa earlier reported that the bank signed a $75-million deal with the African Guarantee Fund to provide loans to female-led micro, small and medium-sized enterprises in four African countries.