The International Finance Corporation (IFC) – the investment arm of the World Bank – has acquired 15 percent shareholding in Gulf African Bank, Kenya’s Sharia compliant bank, for $5 million (Sh425 million).
In addition, a further $3 million (Sh255 million) trade guarantee has been opened for Gulf African Bank under IFC’s global trade finance programme.
According to the Standard Digital News, this IFC programme supports the ability of banks to “deliver trade financing by mitigating risk in new or challenging markets where trade lines may be constrained.”
The acquisition of the 15 percent stake in the bank and the opening of the trade line facility would give the bank’s corporate finance an opportunity of lending to small and medium businesses (SMEs) in the region.
Gulf African Bank said it would use IFC’s financing to boost finance for retail and corporate customers and develop programmes for women entrepreneurs while also extending services to SMEs.
“IFC’s decision to take up a 15 per cent shareholding in Gulf African Bank is a clear indication of their belief not only in our bank’s future but the future of Islamic banking in the region,” Standard Digital News quoted Jamal Al Hazeem, Chairman of Gulf African Bank as saying.
“IFC’s involvement will open up more opportunities for Gulf African Bank’s growth and expansion and enhance our processes. In addition to the IFC partnership, the bank is undertaking a rights issue to increase its capital base by an additional Sh850 million.”