35393 - Coop Bank II

Who We Are
Who We Are

IFC is the largest global development institution focused on the private sector in developing countries. By encouraging growth, IFC advances economic development, creates jobs and improves the lives of people.
More About Us
About IFC

Our Leadership

Development Partners
Accountability

Learn more about accountability
Annual Report

Download the Report
What We Do
What We Do

IFC advances economic development and improves the lives of people by encouraging the growth of the private sector in developing countries. We achieve this by investing in impactful projects, mobilizing other investors, and sharing expertise.
What We Do Overview
SOLUTIONS

Our products and services
OUR PRIORITIES

Climate Business

Fragile & Conflict Afflicted Situations

Gender

Mobilizing Private Capital

Sustainability
SECTORS & EXPERTISE

Agribusiness & Forestry

Creative Industries

Education

Financial Institutions

Funds

Health

Infrastructure

Manufacturing

Public-Private Partnerships

Tourism, Retail & Property

Trade & Supply Chain Finance

Venture Capital

Working Upstream
Where We Work
Where We Work

As the largest global development institution focused on the private sector, IFC operates in more than 100 countries around the globe. We apply lessons learned in one region to solve problems in another.
Overview
By Region

Africa

East Asia and Pacific

Europe

Latin America and the Caribbean

Middle East and Central Asia

South Asia
Our Impact
Our Impact

Our impact improves lives. IFC brings a clear set of advantages to the world’s most challenging markets. Including a history of innovation, a global mandate, and a determination to achieve measurable development impact.
Our Impact Overview
PRINCIPLES & MEASUREMENT

Impact Investing at IFC

Measuring and Monitoring (AIMM)

Evaluation

Sustainable Development Goals (SDGs)

Owned by 186 member countries and consistently rated AAA/Aaa. IFC aims to achieve our mission of promoting development by providing debt and equity to the private sector, through a range of benchmark and bespoke products.

For Partners

For Investors

Get in Touch

Summary of Investment Information

Project Number

35393

Company Name

THE CO-OPERATIVE BANK OF KENYA LIMITED

Date SPI Disclosed

Oct 28, 2015

Country

Kenya

Region

Africa

Projected Board Date

Nov 30, 2015

Environmental Category

FI-2 - Limited

Status

Completed

Last Updated Date

Oct 15, 2023

Department

Regional Industry - FIG ME & Africa

Industry

Financial Markets

Previous Events

Approved : Dec 22, 2015
Signed : Dec 31, 2015
Invested : Jul 5, 2016

Sector

Commercial Banking - General

Additional Project Attributes

Blended Finance

Project Description

Co-operative Bank of Kenya Ltd (“Co-op Bank” or the “Bank”) was established in 1965 as a co-operative society by agricultural marketing co-operative societies to provide access to affordable finance for players in the agricultural sector. Over the years, the Bank has transformed to a leading universal bank in Kenya serving all market segments including co-operatives, corporates, Small and Medium Enterprises (“SMEs”) and micro-enterprises. In 2008, the Bank became a public company and was listed on the Nairobi Securities Exchange (“NSE”). Today, Co-op Bank is the 2nd largest bank in Kenya by total assets and has network of 143 branches, over 8,700 agency banking sites and 567 ATMs. The Bank has four subsidiaries, including a banking subsidiary in South Sudan, and one associate company.

IFC will offer Co-op Bank a senior loan of up to US$105 million the purpose of which will be to provide the Bank with long-term funding to (i) support increased lending to SMEs and co-operatives, including Women-owned Enterprises (“WOEs”), and (ii) to promote affordable housing through expansion of mortgage and construction finance. The project will be supported by IFC’s Global SME Facility (“SME Facility”) and the Women Entrepreneurs Opportunity Facility (“WEOF”).

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	60.0
Equity

IFC's loan to the financial institution described in this SII is targeted for on-lending to the following sector(s):

Product Type	Use of Proceeds
Straight Senior Loan	Housing Finance

IFC's Definitions of Targeted Sectors can be found here.

Development Impact

The financing is expected to have the development impact outlined below:

1. Increased access to finance for SMEs and WOEs: the project will enhance access to finance to SMEs and WOEs in Kenya thereby increasing their growth and competitiveness and foster economic development in the country.

2. Leverage on the scope and reach of Co-op Bank''s business into underserved markets: Co-op Bank is a well diversified universal bank with a wide reach and a strong heritage in the co-operative movement which is active in the key sectors that drive economic growth and job creation such as agribusiness, transport and housing.

3. Demosntration effect: mobilization of funding for the project through the MCCP will encourage other financial institutions and companies to raise capital through syndication thereby deepening access to growth capital.

4. Affordable housing: the project will enable the Bank provide mortgages hence reducing the housing deficit in Kenya by increasing affordable housing.

1. Long-term capital: the proposed funding will provide scarce long-term financing necessary for on-lending to critical sectors of the economy whilst mitigating the Bank''s maturity mismatches.

2. Provision of USD Liquidity: the project will provide a systemic bank in Kenya with much needed US dollar liquidity necessary to help the Bank grow its long-term lending in a sustainable way.

3. Financial sector development: the investment in Co-op Bank reinforces IFC''s commitment to the Kenyan banking sector, the long-term viability of a strategic partner bank and its continuous efforts to strenghten international best practices in banking including environmental and social standards and corporate goverance.

E&S Category Rationale / Risks and Mitigation

The project has been categorized as FI-2 in accordance with IFC’s Environmental and social Review Procedures. The bank provides retail; corporate and project finance; and SME lending services to clients in Kenya. The bank’s portfolio consists mainly of the following sectors: finance and insurance; real estate and construction; utilities; manufacturing; and agriculture. The bank also has limited exposures to power generation projects. The overall portfolio risk is therefore considered medium. The bank’s key sectors typically have limited adverse E&S risks and impacts which can be managed through specific mitigation measures. The identified applicable requirements are the IFC Exclusion List, the applicable national social and environmental laws in Kenya and Performance Standards.

The main E&S risks and impacts relate to the ability of the Bank to identify and manage the E&S risks associated with its lending activities as well as its labor practices. The Bank is an existing client of the IFC, and will be required to adopt the existing E&S management system. The ESMS also includes procedures for the ESMS implementation, responsibilities of staff involved in the ESMS implementation, and tools/guidance materials. The ESMS covers IFC’s applicable requirements, the exclusion list, national laws and the Performance standards. The Bank is, currently, in the process of improving implementation of the ESMS into its existing credit cycle and performance processes. In order to achieve this, the Bank is required to further enhance its E&S due diligence process. When successfully implemented, Co-op Bank’s E&S risk management process will be considered as adequate. The Bank has an E&S Officer responsible for overseeing the formulation and implementation of the E&S risk management procedures. The Bank has provided E&S risk management training to the credit team. A review of the Bank’s labor standards showed that the Bank is aligned with the requirements set forth in Performance Standard 2.

Contacts

For Inquiries About the Project, Contact

Patrick Nyaga
Director of Finance & Strategy
Co-operative Bank House
Haile Selassie Avenue
P.O. Box 48231 - 00100Nairobi, Kenya
Telephone: 3276000Fax: 219831

For Inquiries and Comments About IFC, Contact

General IFC Inquiries
IFC Corporate Relations
2121 Pennsylvania Avenue, NW
Washington DC 20433
Telephone: 202-473-3800
Fax: 202-974-4384
E Mail: Webmaster

Local Access of Project Documentation

N/A

IFC supports its clients in addressing environmental and social issues arising from their business activities by requiring its real sector clients to set up and administer appropriate grievance mechanisms and/or procedures to address complaints from Affected Communities in relation to environmental and social issues arising from IFC's clients' business activities. Since 2012, IFC's Financial Intermediary clients applying the Performance Standards are required to develop External Communications Mechanisms to receive and review inquiries or complaints from any interested party regarding the E&S risks and impacts of their operations.

For IFC projects that are active or under consideration, individual(s), or their authorized representative(s), who allege they have been or will be adversely affected by E&S risks or impacts arising from IFC's clients' business activities, may submit a complaint to IFC directly for consideration. When receiving an E&S complaint, IFC engages with complainants and works with its clients to find solutions to E&S concerns as quickly and efficiently as possible.

Complaints can be submitted to IFC online at www.ifc.org/escomplaints or by email to EScomplaints@ifc.org.

IFC complaint response is separate from and complementary to IFC’s clients’ project level grievance mechanisms and IFC’s Independent Accountability Mechanism (CAO). Lodging a complaint directly with IFC does not, at any time, restrict access to CAO.

Affected communities have unrestricted access to the Compliance Advisor Ombudsman (CAO), the independent accountability mechanism for IFC and MIGA. CAO facilitates the resolution of complaints related to IFC and MIGA projects and sub-projects, undertakes reviews of IFC’s and MIGA’s environmental and social compliance, fosters public accountability for their commitments, and enhances the environmental and social performance of IFC and MIGA.

Independent of IFC and MIGA management and reporting directly to the IFC and MIGA Boards of Executive Directors, CAO helps resolve issues raised about the environmental and social impacts of projects through a neutral, collaborative, problem-solving approach via its Dispute Resolution function. It also reviews IFC’s and MIGA’s compliance with environmental and social policies, assesses related harm, and recommends remedial actions through its Compliance function. Additionally, CAO provides advice to IFC, MIGA, and their Boards to enhance environmental and social sustainability performance and minimize the risk of harm.

Complaints may relate to environmental and social harm regarding any aspect of the planning, implementation, or impact of a project or sub-project, and can be made by any individual, group, community, entity, or other party affected or likely to be affected by the environmental or social impacts of an IFC- or MIGA-financed business activity.

Complaints can be submitted by any of the following methods:

Online form: available at https://www.cao-ombudsman.org/
Mail/Hand Delivery to: 2121 Pennsylvania Avenue, NW, Washington, DC 20433, USA
Voice mail: +1 202 458 1973
Email: cao@worldbankgroup.org
SMS, WhatsApp, Telegram, and Signal: +1 202 650 2627

CAO receives and addresses complaints in accordance with the CAO Policy, which can be accessed at: https://www.cao-ombudsman.org/policies-guidelines.

This Summary of Investment Information (SII) is prepared by IFC to disclose a factual summary of the main elements of the potential investment. It also includes findings and recommendations related to environmental and social considerations regarding this potential investment. The purpose of the SII is to enhance the transparency of IFC’s activities. For any project documentation or data included or attached herein, whether prepared by the project sponsor or otherwise, authorization has been given for public release by the project sponsor. IFC considers that this SII is of adequate quality for release to the public, but has not necessarily independently verified all of the project information therein. It is distributed in advance of IFC Board of Directors’ consideration and may be periodically updated thereafter. Board dates are estimates only and this document should not be construed as presuming the outcome of the Board Directors’ decision. The following SII is disclosed in accordance with IFC's Access to Information Policy (AIP) that went into effect on January 1, 2012.

The map is for illustrative purposes and does not imply the expression of any opinion on the part of the World Bank, concerning the legal status of any country or territory or concerning the delimitation of frontiers or boundaries. Country borders or names do not necessarily reflect the World Bank Group's official position. In some cases, available project location information is limited to the country of the project's activities. Locations are approximate.

Projects

Summary of Investment Information

Project Description

Sponsor / Cost / Location

Development Impact

E&S Category Rationale / Risks and Mitigation

Similar Projects

Contacts

Projects

Summary of Investment Information

Project Description

Sponsor / Cost / Location

Project Sponsor and Major Shareholders of Project Company

Total Project Cost and Amount and Nature of IFC's Investment

Blended Finance

IFC's Investment as Approved by the Board

FIG Use of Proceeds/Beneficiaries

Location of Project and Description of Site

Development Impact

Anticipated Impact Measurement & Monitoring (AIMM) Assessment

IFC's Role and Additionality

E&S Category Rationale / Risks and Mitigation

Environmental & Social Categorization Rationale / Key Risks & Potential Impacts

Environmental & Social Management System (ESMS)

Mitigation Measures / Environmental & Social Action Plan (ESAP)

Press-Release

Related Environmental Document

Similar Projects

Contacts

Information on E&S Complaints and Grievance Mechanisms

Disclaimer