Project detail - I AND M BANK LIMITED NASIRA PORTFOLIO

I AND M BANK LIMITED NASIRA PORTFOLIO

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Who is our client

I&M Bank Kenya is wholly owned subsidiary of I&M Holdings Limited, a publicly quoted company at the Nairobi Securities Exchange (NSE). The bank was founded in 1974 and evolved from a community financial institution to a publicly listed major regional commercial bank offering a full range of corporate, SME and retail banking services. I&M Bank has been a client of FMO since 2010 and has demonstrated consistent growth and stable performance over the years, growing its balance sheet from USD 0.9mln in 2010 to USD 2.7bln in 2021, whilst maintaining a strong CAR and good profitability.

Funding objective

FMO will provide I&M Bank Kenya with a USD 15mln (in LCY equivalent) Nasira portfolio guarantee covering loans provided to Covid-19 affected micro and small enterprises (MSEs) in Kenya. The guarantee aims to support our client in increasing its lending and market share in the MSE segment. MSEs in Kenya, especially youth and women-owned, have limited access to external financing despite being a key driver of the Kenyan economy.

Why we fund this project

I&M Bank Kenya is a strong and well-reputed bank in Kenya, and a long-standing client of FMO. Our proposed facility will deepen our relationship with I&M Bank by supporting the bank in achieving its strategy to increase access to finance to smaller enterprises in Kenya.

Environmental and social rationale

Environmental & social risk Category FI-A, based on the exposure I&M Bank has to large and long-term corporate loans, including project finance. Overall exposure to high E&S risk sectors (agriculture, mining & quarrying and energy & water) is approximately 4% whereas the project finance transactions mainly relate to manufacturing, construction and real estate property development. The activities in these sectors can potentially result in negative environmental and social impacts. I&M Bank has in place an environmental & social management system to manage these impacts. The Environmental and Social Action Plan that?s accompanying this transaction is geared towards increasing the bank?s environmental & social risk management capacity and enhancing the quality of the environmental and social due diligence as well as a functioning grievance mechanism.

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Date Total FMO financing
6/29/2022 KES 1638.42 MLN
Region
Africa
Country
Kenya
Sector
Financial Institutions
Signing date
6/29/2022
Total FMO financing
KES 38.84 MLN
Fund
MASSIF
Risk categorization on environmental and social impacts, A = high risk, B+ = medium high risk, B = medium risk, C = low risk Environmental & Social Category
(A, B+, B or C)
A