IFC and Standard Chartered launch local currency lending initiative in Kenya

IFC and Standard Chartered launch local currency lending initiative in Kenya - Trade Treasury Payments

The International Finance Corporation (IFC), a member of the World Bank Group, has partnered with Standard Chartered to scale up local currency lending for private enterprises in emerging markets, beginning with a KSh 9 billion ($70 million) facility in Kenya for advancing digital infrastructure.

As part of the agreement, Standard Chartered will extend local currency loans to IFC in selected markets. IFC will then on-lend these funds to private sector clients, offering a buffer against currency risk, which is a persistent challenge for firms that earn revenue in local currency but borrow in dollars or other hard currencies.

John Gandolfo, IFC Vice President and Treasurer, Treasury & Mobilization, said, “With exchange rate volatility and rising debt pressures, the need for local currency financing in emerging markets has become increasingly evident. When businesses borrow in the same currency as their revenues, they can concentrate on growth instead of exchange rate fluctuations. As we increase our local currency financing abilities, we plan to replicate this facility in other currencies across the globe.”

Currency mismatch remains one of the primary constraints facing businesses in developing markets. When revenues and liabilities are denominated in different currencies, exchange rate volatility can threaten financial stability. For many local firms, especially SMEs, access to affordable, long-term local currency financing is limited. This deal, centred on Kenya’s digital infrastructure sector, is expected to broaden development priorities in the region.

Kariuki Ngari, Managing Director and Chief Executive Officer, Kenya and Africa at Standard Chartered said, “This partnership represents a pivotal step forward in enhancing Africa’s financial resilience. By facilitating local currency financing, we not only address one of the most significant challenges facing the businesses across the continent – exchange rate vitality – but also open up new avenues for long term economic growth. Kenya’s digital infrastructure sector is particularly well positioned to benefit from this inaugural transaction, setting the stage for scalable and sustainable financing solutions. These models will drive economic growth and empower local enterprises supporting prosperity across Africa.”

Sunil Kaushal, Global Co-Head, Corporate & Investment Banking, and CEO, ASEAN and South Asia markets at Standard Chartered, added, “This landmark transaction in Kenya reflects our commitment to supporting financial resilience in local markets. By partnering with IFC, we’re delivering local currency solutions that help corporates in emerging markets manage currency volatility and access the long-term capital they need to grow. With our deep roots and liquidity access across emerging markets, we are well positioned to scale this initiative and enable more businesses to access stable financing options.”

IFC has long maintained that enabling firms to borrow in their local currency is essential for inclusive economic development. Since FY2015, the institution has deployed over $30 billion in local currency financing across 67 currencies through a combination of loans, bonds, and structured products.

The transaction will help with finding practical mechanisms for de-risking investment in low- and middle-income countries. With rising debt burdens and continued FX instability, the demand for local currency solutions is likely to grow, particularly in sectors such as infrastructure, energy, and financial services.

IFC operates in more than 100 countries and focuses on leveraging private sector investment to promote development outcomes. Standard Chartered, present in 53 markets globally, supports trade and investment across Asia, Africa, and the Middle East, with deep ties to emerging market economies.