KENYA – Equity Bank, a Kenyan financial service holding company has received financing worth EUR 120 million (US$144m) from the European Union and the European Investment Bank, to enable it provide liquidity to Kenya’s small and medium-sized enterprises (SMEs), including the agriculture sector.
The financing package is comprised of a €100 million (US$120m) loan from the European Investment Bank (EIB) and €20 million (US$24m) of European Union (EU) grant.
According to EIB, the assistance will further strengthen Equity Bank’s capacity to assess, execute and monitor longer-term agricultural value chains investment projects and further develop provision of long-term financing for agriculture.
“As an inclusive regional financial institution these facilities strengthen Equity’s position to further enhance the strength of MSMEs which are key actors in value chains and ecosystems in the economy.”Dr. James Mwangi – Group Managing Director and Group Chief Executive Officer of Equity Group Holdings Plc
In addition, it will stimulate investment, create decent jobs, boost business resilience at a time of global economic slowdown and contribute to the country’s recovery efforts and sustainable development.
“As an inclusive regional financial institution these facilities strengthen Equity’s position to further enhance the strength of MSMEs which are key actors in value chains and ecosystems in the economy.
“We value our long-term partnership with the EIB and the European Union who have walked with us and our customers on our path for sustained human development for many years including their investment to scale Kilimo Biashara,” said Dr. James Mwangi, Group Managing Director and Group Chief Executive Officer of Equity Group Holdings Plc.
Agriculture contributes about 51% to Kenya’s GDP (26% directly and another 25% indirectly), 60% of employment and 65% of the exports.
Growth of agriculture based economic activity is constrained by limited long-term financing, which delays its development and modernization.
Increasing private sector access to long-term financing is crucial to unlock development potential across all sectors impacted by the COVID19 pandemic.
“New EIB and EU support for leading Kenyan partner Equity Bank will help entrepreneurs, business and agricultural small holders across Kenya to access finance and better withstand the economic challenges and business uncertainties caused by COVID-19.
“Today’s new agreements demonstrate Team Europe and Kenya joining forces to beat COVID and help business flourish,” said Thomas Östros, Vice President of the European Investment Bank.
Simon Mordue, European Union Ambassador to Kenya reiterated saying, “The EU and EIB support to Small and Medium Enterprises will directly support Kenyan entrepreneurs and farmers who need this financing to cushion them from the effects of COVID-19. This is a true testament of our friendship with the people and the Government of Kenya.”
Equity Bank is the largest partner for EIB backed private sector support in Kenya.
This recent programme is part of the larger €300 million (US$361m) EU response to the COVID-19 crisis in Kenya and targeted EIB support for economic resilience across Africa.
Liked this article? Subscribe to Food Business Africa News, our regular email newsletters with the latest news insights from Africa and the World’s food and agro industry. SUBSCRIBE HERE