KENYA – Equity Group Plc has signed its sixth long-term credit facility, a US$100 million loan deal with the Africa Development Bank (AfDB), the latest in a series of long-term credit to allow the Kenyan lender to offer concessional medium-term loans to small and medium enterprises (SMEs).
In September 2020, the bank signed a US$50 million loan facility with the International Finance Corporation (IFC), a US$100 million with French financier Proparco in October, and a US$148.5 million loan facility with the European Investment Bank in March 2021.
The Nairobi Securities Exchange listed lender has also signed other credit facilities like US$100 million from European development banks DEG, FMO and CDC-UK, and US$75 million from the African Guaranty Fund to fortify credit flows and liquidity to support SMEs.
“The timing of the facility’s disbursement could not have been more appropriate especially as businesses seek to remain operational in the midst of a Covid-19 pandemic that is causing financial havoc”
Stefan Nalletamby – Director for Financial Sector Development, AfDB
“The timing of the facility’s disbursement could not have been more appropriate especially as businesses seek to remain operational in the midst of a Covid-19 pandemic that is causing financial havoc,” said Stefan Nalletamby, AfDB’s director for financial sector development.
Equity Bank will not participate in the Kenya government -led credit guarantee scheme to unlock loans to SMEs having secured the mix of guarantees and cheap long-term loans from several development finance institutions.
Equity Group CEO James Mwangi said the financing will unlock potential to lend to SMEs at 13 per cent for five years.
In September last year, the Kenyan government said it would provide US$91 million to guarantee commercial loans for SMEs a bid to cushion them from the economic fall-out arising from the coronavirus pandemic.
The loans would be issued through local banks which will be partly reimbursed for defaults alongside collateral provided by SMEs.
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