Equity Bank gets Sh8.3 billion to fund SMEs in East Africa
The International Finance Corporation (IFC), a member of the World Bank Group, has extended a loan of Sh8.3 billion ($100 million) to the Equity Bank Group.
The funds will be used for lending to small and medium-sized businesses (SMEs) and support agriculture and women projects within East Africa.
The funds are expected to support growth of Equity Bank Group’s lending portfolio in Kenya, Uganda, Tanzania, Southern Sudan and Rwanda.
The bank focuses on extending inclusive financial services especially to the undeserved populations in the region.
"IFC’s credit line will enable Equity Bank to increase its lending program to SMEs and support agriculture and women-led projects in the region," Dr James Mwangi the Group’s chief executive told a media briefing in Nairobi on Wednesday.
Mwangi singled out inaccessibility to affordable credit as a significant barrier to the growth of the SME sector, most of which are owned by women and the youth.
" Financial exclusion arising from lack of credit access has been the limiting factor affecting potential in SMEs to grow their business," he said.
Mwangi explained that the loan facility would not only enable the bank to offer affordable credit to the SMEs but will also stimulate them to focus on regional export market and match their strategic growth plans with long term funding.
Mwangi said through access to credit, SMEs will be expected to expand their businesses, increase savings and reduce unemployment.
" Small and medium business, agribusiness and women entrepreneurs can catalyze growth in African economies, but they face challenges gaining access to finance," said Jean Philippe Prosper, IFC Director for East and Southern Africa.
He said the partnership between Equity Bank and IFC would help extend banking services to the underserved entrepreneurs, build businesses and create jobs both in Kenya and East Africa.
IFC’s investment and advisory services have teamed up with nine banks and one microfinance institution in Kenya to help them increase business with SMEs.