The International Finance Corporation (IFC) is set to become Equity Bank‘s second-largest shareholder. This is after the signing of an agreement to purchase insurance firm Britam’s stake in the lender. The institutional investor will buy 253.1 million shares of the bank from Britam at KES 55 each based on negotiations with the insurer.

IFC will acquire 164.5 million shares of the lender directly. Another 88.5 million shares will be acquired through its IFC Financial Institutions Growth Fund LP.

Equity Bank has also gotten a loan of KES 18.6 Billion (US$ 165 million) from IFC. This will help it increase working capital and trade-related lending to its small and medium-sized enterprise (SME) clients in Kenya. This will especially help those facing COVID-19 related challenges.

According to the deal, IFC will directly provide KES 5.6 billion, with the remaining KES 13 billion coming from partners.

The loan from IFC, which is a member of the World Bank Group, is one of the single-largest credit facilities to a Kenyan lender.

Besides shoring up the bank’s capital base, the new loan will also be lent to customers fitting IFC’s impact investing criteria. IFC encourages the banks it funds to lend to women-owned enterprises and climate-related ventures such as renewable energy projects.

The facility will partly support Equity’s lending towards Climate Smart Projects and the local SME sector. The later has been hard-hit by the Covid-19 containment measures.

The loan, which will ultimately support hundreds of Kenyan businesses in the manufacturing, health, trade, transport, and consumer goods sectors, is part of IFC’s global $8 billion fast-track COVID-19 facility, announced in March and designed to help businesses maintain operations and jobs during—and after—the COVID-19 crisis.

Dr James Mwangi, Equity Group Managing Director, and CEO said, “IFC’s loan, part of our business continuity management plan, will help Equity Bank extend much-needed support to our clients, particularly to SMEs in sectors hit hard by COVID-19. We have purposed to support and walk with them so that they can survive during this crisis, recover, and thrive after it.”

Manuel Moses, IFC Country Manager for Kenya, said, “IFC’s longstanding partnership with Equity Bank underscores our commitment to Kenya’s financial sector and the wider economy, especially during these difficult economic times. Keeping businesses solvent and protecting jobs are essential parts of IFC’s response to the unprecedented challenges of COVID-19.”