Kenya: KCB gets US$105 mln from World Bank lending arm

Kenya Commercial Bank (KCB) , the country's biggest lender by assets, has received a US$105 million, seven-year loan from the World Bank's private lending arm for mortgages and lending to small businesses, it said.

The funding from the International Finance Corporation (IFC) will be used to widen access to finance for small and medium enterprises (SMEs), and increase mortgages in the region. The bank operates in Tanzania, Uganda, Rwanda and South Sudan.

Demand for mortgages has risen in recent years in Kenya and east Africa as investors cash in on returns from real estate, which has outpaced investment in stocks, Reuters reports.


The bank's chief executive, Martin Oduor-Otieno, said in a statement KCB would raise its lending to the SME sector to 10 billion shillings ($107 million), from 6.3 billion in 2010.

SMEs face greater business obstacles than large enterprises in securing loans, Phillipe Prosper, regional IFC director, said.

KCB's pretax profit for the first half of this year rose more than a third to 5.74 billion shillings, due to an increase in net interest income.