Kenya has secured a Kshs 70.5 billion 5-year and 3-year syndicated medium-term loan facility from a group of lenders. This was a reduction from the Kshs 84.5 million that the government had asked to borrow. The Lenders of the loan are Citibank, Merchant Bank, London Branch, South Africa Limited, and Standard Chartered Bank.
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A statement from the lenders read that the syndicated loan is reserved for use by The National Treasury to aid in financing the development of projects as part of the budget approved in the financial year 2022-2023 that ended in June. This will help boost the country, which has struggled to access global capital markets after surging yields on Eurobonds in 2022. The international credit market has, however, delayed the mobilization of funds due to high interest rates. Either way, the banks that acted as the lead coordinators did not provide information on the interest rates for the secured Kshs 70.5 billion loan facility.
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The loan offers benefits to both borrowers and lenders. For borrowers, they provide access to a larger pool of capital, flexibility in loan terms, and expertise from multiple lenders. Lenders benefit from sharing the risk and diversifying their portfolios, potentially earning higher returns than individual loans.
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