K-Rep was founded in 1984 to provide support and loans (for on lending) to NGOs involved in small and micro enterprise development. K-Rep eventually started making loans directly which led to the establishment of K-Rep Bank in 1999 as a subsidiary of the K-Rep Group (a company limited by guarantee). Although the Bank specializes in microfinance (it makes microfinance loans to both individuals and groups), it also offers mainstream banking services. K-Rep Bank’s major shareholders are the K-Rep Group (25%), IFC (16.7%), ShoreCap (8.2%), African Development Bank (15.1%), Triodos (11%), FMO (5%), KWA (10%) a membership Co-operative Society for the staff and members of the KGL, the ICDC Investment Company (3.8%) and individual founding members (5.2%).

The total project cost and proposed IFC investment is a local currency senior loan of up to KES 500 million (approximately $7.5 million equivalent).

K-Rep Bank is located in Nairobi Kenya, with country wide branches.

IFC finance is expected to help strengthen K-Rep’s ability compete more effectively with other banks and micro finance institutions in its market space, thus enhancing the bank’s growth. The project will allow K-Rep to meet the long term finance needs of its micro finance clients especially schools and women owned businesses. The Bank’s local currency ROE and EROE are expected to exceed the Bank’s WACC, over the life of the project.

The project, which falls under the Africa MSME program, is part of IFC’s strategy to assist the bank to grow and strengthen its position in the MSME market especially through product differentiation and targeting of underserved sectors such health and education and women entrepreneurs, as well as providing longer term lending to the MSME sector.

This project involves IFC support for the business of Micro and Small Enterprise finance and has been classified as a Category FI project according to IFC’s Environmental and Social Review Procedure. Considering the nature of activities supported, the project will be required to:

- Develop a Social and Environmental Management System (SEMS) relevant to its business process, prior to disbursement, that is satisfactory to IFC, and that ensures that all its investments are screened and processed to avoid supporting activities on the IFC Micro-finance exclusion list and that ensures that its corporate projects are in compliance with the applicable National Environmental and Social Laws and regulations;
- Identify responsible, qualified persons to manage and implement the SEMS;
- Demonstrate commitment and resources to implementing the SEMS; and take action to remedy any gaps in implementation on an ongoing basis; and
- Submit a periodic Social and Environmental Performance Report to IFC as per a format to be provided by IFC.