Equity BCDC is the resulting entity of the merger between Equity Bank Congo and Banque Commerciale Du Congo (BCDC), which was approved in December 2020. The Bank is the second largest bank in DRC with a balance sheet of US$3.7 billion and a nationwide footprint of 70 branches, 203 ATMs, serving a customer base of more than one million. Equity BCDC offers traditional banking services to MSMEs, retail clients (both domestic and from the Congolese diaspora), corporates, and institutional clients.

Equity BCDC is the Congolese subsidiary of EGHL and has 100% of its operations in DRC.

Equity Group was founded in Kenya as the Equity Building Society in October 1984, a mortgage provider for low-income individuals in Kenya, and was converted into a commercial bank in 2005. As part of its geographical diversification strategy, EGHL expanded its operations in East Africa and is currently present in 6 countries through subsidiaries in Kenya, the DRC, Uganda, Tanzania, Rwanda and South Sudan. Equity Bank Kenya (EBK) is the largest Kenyan-owned bank by market capitalization in the Eastern African region. EGHL has an asset base of over US$11 billion, with over 16.2 million customers, as of December 2021, making it one of the biggest banks by customer base in the region.                                                  

 The project consists of a RSF for a portfolio of up to US$50 million with Equity BCDC, under IFC’s Small Loans Guarantee Program (“SLGP”) which is supported by the IDA18 IFC-MIGA Private Sector Window Blended Finance Facility (IDA PSW-BFF), to de-risk and scale-up lending to SMEs, in this case with a focus on underserved women-owned SMEs (WSMEs) in the DRC. IFC’s exposure will be up to US$25 million, or 50% of the RSF.  IDA PSW-BFF was created by the Word Bank Group to catalyze private sector investment in IDA countries, with a focus on fragile and conflict-affected states. IDA PSW BFF support would enable IFC to rapidly roll out a program of risk sharing facilities to reach segments facing serious market failures in IDA countries and provide access to finance to such underserved targeted market segments which IFC could not otherwise serve due to the associated high risk.

This project benefits from IDA PSW-BFF support and the concessionality embedded in the Program. The level of concessionality (i.e., “subsidy”) to be provided by IDA PSW BFF is estimated up to 9 percent of the total portfolio of US$800mn, for the whole SLGP. This estimate is based on the present value of the difference between (i) a “reference price” (either a market price if available; the price calculated using IFC's pricing model, which comprises three main elements: risk, cost and profit, or a negotiated price) and (ii) the “concessional price” being charged under the Program. SLGP is a platform approach that can be accessed by other financial institutions in the DRC and other IDA PSW markets.                                                  

The Project is also expected to be potentially supported by Women Entrepreneurs Finance Initiative (“We-Fi”) in the form of a performance-based incentive (“PBI”) of up to [0.25%] of the total project cost of USD 25 million to incentivize on-lending to women-owned/women-led SMEs. The estimated subsidy provided by We-Fi assumes that the Project will fully reach the agreed impact and shall only be paid out upon achievement of the pre-defined target. We-Fi’s support would enable IFC to reach more women SMEs that may otherwise not be served without its support. IFC is open to engaging further with other financial institutions and consider structures similar to the one proposed in this investment with the support of We-Fi. We-Fi is a multi-donor initiative to address barriers to financial access and provide related services that address public and private-sector constraints to women entrepreneurs and women-led SMEs across the developing world, thereby promoting jobs and boosting economic growth.

Further details and historical information on estimated subsidy levels in IFC’s blended finance portfolio can be found at: www.ifc.org/blendedfinance. As is the case with all IFC’s blended concessional finance co-investments, this project has been assessed against the Enhanced Blended Concessional Finance Principles for Development Finance Institution (“DFI”) Private Sector Operations adopted by IFC and more than 20 other DFIs in 2017. Further information on these Enhanced Principles and IFC’s blended finance approach and governance can also be found at: www.ifc.org/blendedfinance.                                                  

 The Bank is headquartered in Kinshasa, DRC and has 70 branches across DRC.                                                  

 Given the bank size, the overall CG risk is deemed Moderate. Equity BCDC corporate governance practices continue evolving after the merger integration. The board size had been reduced to ten directors. The potential lack of expertise needed at the board committees’ level is still a concern. Ideally, the board needs to conduct a structured board evaluation within one year to assess its dynamic and review its committees’ composition. But Equity BCDC need to focus on critical issues:  (a) appoint a qualified Chief Internal Auditor reporting to Audit Committee and (2) appoint a dedicated and qualified Chief Risk Officer reporting to the risk committee.