NAIROBI, Kenya Dec 8 – Ecobank Kenya has signed a $15 million (Sh2 billion) loan agreement with Proparco, a subsidiary of the French development agency to finance private sector development.
The move aims at securing long term financing for lending to its customers.
Ecobank Kenya Managing Director Tony Okpanachi says the deal gives the bank flexibility and the capability to reach out to the small and medium enterprise sector as a new segment for the bank.
"Most banks have short term funds and when you want long term transactions they have issues. Now Ecobank Kenya is well positioned to be able to take some of those transactions both in the SME and deserving corporate," Mr Okpanachi said.
The partnership is aimed at boosting private investment in emerging and developing countries in favour of growth, sustainable development and reaching the millennium development goals.
"Through such partnerships Ecobank hopes to increase financial support to different organisations and enterprises thus amplifying development in Africa," he said.
Proparco East and Central Africa Regional Representative Ghislain de Valon said the firm plans to continue making similar partnerships in the region to boost economic growth.
"We are very keen in ensuring that Africa benefits through financing projects that will enhance the people\’s lifestyle both economically and socially," Mr de Valon said.
Proparco has been involved in financing different projects across Africa including telecommunications, financial, education, agriculture and energy.
Ecobank is also leading in a consortium to provide Sh1.6 billion medium term financing to Mumias Sugar Company for a new Ethanol plant to be commissioned in 2011.
At the same time, Mr Okpanachi revealed the bank plans to consolidate its operations going into 2011 rather than focus on expansion.
He said the bank would instead look at emerging opportunities such as SME financing as a way of growing its business in the country.
"The massive expansion you saw over the last one year is not going to be the case in 2011. We are looking at new opportunities we can explore within Kenya," he said.
The bank however plans to have 23 branches by the end of 2011, up from its current 19 branches.