, NAIROBI, Kenya, Dec 3 – The European Investment Bank (EIB) has approved a Sh5.6 billion (€50 million) credit line to Equity Bank to facilitate onward lending to Small and Medium Enterprises across the region.
Speaking at the signing of the facility, Equity Bank Group Managing Director James Mwangi said the funds will be commercially advanced to eligible SMEs to accelerate their business performance.
The credit line which is part of the EIB’s Global Loan facility, is expected to be channelled towards a growing number of regional SME businesses seeking local or international currency denominated business loans.
“Beyond providing SME loans, we shall also provide them with access to technical business development specialists from Equity Consulting Group to enable them grow. Our commitment is to advance an integrated solution that literally guides the SME transition to a small corporate level,” Mwangi said.
Under the agreement, the funds will be available to customers in any of its banking subsidiaries in Tanzania, Rwanda, Uganda and South Sudan.
“This facility will allow us to bridge existing financing gaps to the SME sector and will undoubtedly help to further leverage Equity Bank’s capacity to deepen its lending activities to these vital economic sectors,” Mwangi said.
EIB’s Head of Regional Representation Kurt Simonsen, further disclosed that Equity Bank will also be eligible to enjoy the EIB Technical Assistance programme support.
“The EIB Technical Assistance Programme support is a programme geared at raising the technical capacity of financial and related development partners,” Simonsen explained.
The EIB’s facility will be directed at various SME projects in the agro industry, fishing, food processing, and manufacturing, construction, transport, tourism, education and healthcare sectors.
Plans are also underway for EIB to further provide a Sh 3.3billion (€ 30 million) loan facility to Equity Bank to facilitate onward lending to Microfinance enterprises across the region.
Listed on the Nairobi and Uganda Securities Exchange, Equity Bank shareholders last week formally approved a proposal seeking to establish a holding company to act as the group investments vehicle.
In a strategic effort geared at setting the pace for the rollout of the Bank’s 3.0 strategy, the Bank is seeking to crystallize its Bank’s operations as an integrated financial services provider.