36791 - Kenya Commercial Bank Limited

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Summary of Investment Information

Project Number

36791

Company Name

KCB GROUP PLC

Date SPI Disclosed

Nov 28, 2016

Country

Kenya

Region

Africa

Projected Board Date

Aug 5, 2016

Environmental Category

FI-2 - Limited

Status

Active

Last Updated Date

Jun 11, 2022

Department

Regional Industry - FIG Africa

Industry

Financial Markets

Previous Events

Approved : Sep 22, 2016
Signed : Nov 1, 2016
Invested : Nov 15, 2016

Sector

Commercial Banking - General

Project Description

The proposed engagement with KCB Group Limited (“KCB” or “the Group”) is aligned to IFC’s strategy for the African financial sector. The Project is comprised of a $75 million loan facility to KCB to be on lent as Tier II qualifying subordinated debt. This investment is part of a US$250 million capital raising exercise by KCB to strengthen the Bank’s capital position in the context of the increased regulatory capital buffer requirements while supporting the bank as it expands into the SME segment and invests in alternative delivery channels to deepen financial inclusion.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	75.0
Equity	70.0

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	Loans to SME Borrowers

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

Development Impact

The Project is expected to have a high development impact in the following areas:

i. Increasing access to finance and financial inclusion in existing markets and potentially into new markets in the East Africa region.

ii. Supporting the development of financial markets by working with a regional banking group to develop very important products (housing, gender and MSME finance) that can materially contribute to economic growth.

iii. Fostering sustainable financing through the E&S support that IFC continues to provide to KCB to become a leading champion and catalyst of sustainability in the financial system in the East Africa region.

1. Comprehensive support: IFC brings unmatched combination of financing and expertise backed by a AAA balance sheet and global network. This investment is in line with IFC''s strategy to establish long-term partnerships with emerging players in developing countries. As the partnership strengthens and KCB becomes increasingly more sophisticated, the Bank will be able to draw on IFC''s global expertise for product innovation and banking best practices and serve as an example to other Bank''s in the region.

2. Stamp of Approval: IFC''s partnership with KCB will positively influence the perception of the market and the public, and could allow the Bank to attract additional long term funds both locally and from the international market

3. Environmental and social standards: IFC is supporting KCB towards becoming an Equator Principles Financial Institution.

E&S Category Rationale / Risks and Mitigation

The project has been categorized as FI-2 according to IFC’s Environmental and Social Review Procedures. KCB is a universal bank which provides financial services to SME, corporate and trade clients across a number of sectors predominantly in construction, manufacturing, services and trade. The bank does not have significant exposures to high risk sectors; the overall portfolio risk is considered medium. The E&S risks and impacts associated with the banks’ key sectors are considered mostly limited and can be readily addressed through mitigation measures. The applicable requirements are the Exclusion List, the applicable environmental and social laws and the Performance Standards.

Contacts

For Inquiries About the Project, Contact

David Kitheka
Head, Investor Relations
KCB Group Limited
Head office, Kencom House
P. O. Box 48400 – 00100
Nairobi, Kenya.
(254) 20 3270000
(254) 20 3270629

mailto:dkitheka@kcb.co.ke

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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.

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