Equity Bank receives US$150.4m loan facility from EIB to support SMEs

KENYA – Equity Group Holdings has signed a US$150.4 million loan facility with the European Investment Bank (EIB) and the European Union (EU) to support small businesses in Kenya.

The loan facility is in Kenya Shillings to match the operating currency of SME businesses and eliminate the risk of foreign exchange.

The US$23.7 million grant on the other hand allows capacity building on the borrowing clients to de-risk lowering the risk of default and hence allowing affordability by adoption of low-risk priced interest rates.

In response to the Covid-19 pandemic, Equity Bank launched an offensive and defensive approach to support customers to sustain themselves while innovating alongside MSMEs who are leveraging on the opportunities that have presented within the crisis.

Equity has committed to loan repayment accommodation for up to 45 per cent of the customers whose cashflows and operation cycle were deemed likely to be negatively impacted during the pandemic.

“The facility extends over the entire period of the program’s 5 years, ensuring the matching of long-term investment by SMEs to emerge stronger post the Covid-19 period”

“The impact of the Covid-19 pandemic started as a health crisis, which quickly became an economic and humanitarian crisis that has seen almost 40 per cent of Kenyan small business owners negatively affected,” said James Mwangi, Managing Director and CEO of Equity Group

Mwangi said that Equity’s goal is to keep the lights of the economy on by ensuring firms and businesses remain open, sustain employment and by keeping markets open facilitating a quick recovery of businesses and the economy at large.

The facility extends over the entire period of the program’s 5 years, ensuring the matching of long-term investment by SMEs to emerge stronger post the Covid-19 period.

The financing package through the US$23.7 million grant covers amongst other initiatives, the provision of technical assistance to enhance Equity Bank’s capacity to assess, execute and monitor longer-term investment projects in the agriculture value chains and further develop its longer-term agricultural financing activities.

This is the third tranche for Equity Group after having signed a US$50 million facility with IFC in and a US$100 million facility from Proparco in 2020 bringing the total to US$275 million, US$150 million, and US$150.7 million, to avail credit flows and liquidity to MSMEs.

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