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Equity Acquires Sh 11 Billion Loan to Support its Expansion Across East and Central Africa

Equity-AfDB Loan
This is the sixth such loan the bank is acquiring to support SMEs in the East and Central African region. Photo: Courtesy

Equity Group Holdings (EGH) has signed a USD 100 million loan (Ksh 11 Billion) facility to support its expansion across Eastern and Central Africa, enhancing its ability to serve small and medium enterprises (SMEs) as it grows.

In addition to operating in 7 African countries – Kenya, Rwanda, Uganda, South Sudan, Tanzania, the Democratic Republic of the Congo and Ethiopia – the Group has recently expanded its operations in the DRC by merging its existing operations of Equity Bank Congo with its acquisition of BCDC to form EquityBCDC, now the second largest financial services company in the country.

We have seen the impact of pumping oxygen to our MSMEs during this period. They have been able to re-imagine, repurpose and retool their enterprises and emerged more resilient thereby protecting jobs.

Dr James Mwangi

At the signing, Dr. James Mwangi, Managing Director and CEO of Equity Group Holdings said, “Together with the African Development Bank Group, Equity Group will be strongly positioned to support MSMEs to keep their lights on during the prevailing COVID-19 pandemic that has slowed down the economy impacting on the cashflows of enterprises.

By extending credit to them during this period, Equity demonstrates its commitment to walk with its customers, and to empathize with their socio-economic situation brought about by the pandemic.” Dr Mwangi added, “We have seen the impact of pumping oxygen to our MSMEs during this period. They have been able to re-imagine, repurpose and retool their enterprises and emerged more resilient thereby protecting jobs and creating more job opportunities through venturing into more innovative initiatives such as manufacturing of internationally certified quality PPEs.”

The loan, a tier two facility with a seven-year maturity, is expected to promote EGH’s ability to offer bespoke products to MSMEs, strengthen its balance sheet and optimize its capital structure across the continent with a special focus on women and youth entrepreneurs.

“EGH has a strong track record of designing products suited to the needs of SMEs as well as emerging corporates. The timing of the facility’s disbursement could not have been more appropriate especially as businesses seek to remain operational in the midst of a COVID-19 pandemic that is causing financial havoc,” said Stefan Nalletamby, AfDB’s Director for financial sector development. “We are very pleased to collaborate with EGH in playing a countercyclical role during this pandemic.”

Equity’s prudent approach to conserving its cashflow and supporting MSMEs through the COVID-19 crisis has provided more comfort to lenders across the continent and its partnership with the African Development Bank will now facilitate further financing of MSMEs.

This is the sixth tranche for Equity Group after having signed a USD50 million (Sh 5.5 Billion) loan facility with IFC in September; a USD 100 million (Ksh 11.0 Billion) from Proparco in October and a EUR 125 million (Sh 16.5 Billion) loan facility signed last week with the European Investment Bank, a USD 100 Million (Sh 11 Billion) Credit Facility with Leading European Development Banks DEG, FMO and CDC-UK and a USD 75 Million (Shs 8.25 Billion) Loan Facility with the African Guaranty Fund to fortify credit flows and liquidity to MSMEs totalling Sh 63.25 Billion.

 

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