Equity Group has signed a Ksh. 11 billion ($100 million) loan facility with Germany’s DEG, the Netherlands FMO and the UK’s CDC Group. The signing comes in the wake of Equity’s commitment to support MSMEs to cope with COVID-19 containments measures.
In response to the COVID-19 crisis, Equity launched an approach to support customers leveraging on the opportunities presented within the crisis.
Equity committed to loan repayment accommodation for up to 45% of the customers whose cashflows were negatively impacted during the COVID-19 pandemic. Most of the new opportunities funded were in PPE manufacturing, logistics, online businesses, agro-processing, fast moving consumer goods and agriculture value chains.
DEG, CDC Group and FMO invest to support the social and economic development of countries across Africa. Supporting MSMEs is a long-term priority particularly as the segment remains under-financed and in need of capital.
In making the announcement, Dr. James Mwangi, Managing Director and CEO of Equity Group stated, “The impact of the COVID-19 pandemic started as a health crisis, and quickly became an economic and humanitarian crisis that has seen more than 40% of Kenyan micro, small and medium business owners affected by the great economic slowdown. The three development banks recognize the critical role that Equity plays in promoting access to finance for MSMEs.”
Commenting on the transaction, Christiane Laibach, CEO of the DEG Management Board said, “DEG is delighted to realize a further financing for Equity Bank, together with our European partners CDC and FMO. Through our cooperation we are contributing to supplying local SMEs with credit, which is particularly important and in demand at present.”
This is the fourth financial partnership for Equity Group after signing a Ksh. 5.5 billion ($50 million) loan facility with IFC in September. The Group later signed a Ksh. 11 billion ($100 million) from PROPARCO in October and a Ksh. 16.5 billion (EUR 125 million) loan facility signed with the European Investment Bank. These partnerships aim to fortify credit flows and liquidity to MSMEs totaling Ksh. 44 billion.