Originally published: May 5, 2008
Source: East African Business Week
Standard Chartered Bank (SCB) has offered a cross currency swap to Faulu Kenya to absorb the foreign currency risks for a EUR5 million (US$7.5 million) subordinate loan obtained by Faulu Kenya from Deutsche Bank Microcredit Development Fund. The transaction will lock the exchange rate fluctuations for the next seven years. This will allow Faulu Kenya to access KES460 million (US$7.5 million) without having to bear any foreign exchange risks.
Faulu Kenya chief executive officer Lydia Koros said the institution could have had difficulty accessing the funds in foreign currency and the intervention by SCB would go a long way in helping the MFI meet its key mandate.
Mark Myers, executive director in charge of wholesale banking at SCB said the bank, as a part of its growth strategy, plans to become the deposit taking bank for MFIs. SCB will support key MFIs though provision of finance as well as technical support to help in capacity building for growth in the sector. In 2007, it advanced a KES200 million (US$3 million) loan to the Kenya Women Finance Trust.
Read the complete article: Stanchart in First Currency Swap for Micro-Finance Firm (East African Business Week)