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AFD group grants a US$100 million loan to Equity Bank to support Kenyan SMEs
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This major operation illustrates Proparco’s firm commitment to the African private sector amid current COVID-19 crisis and economic turmoil, with a particular focus on job-creating SMEs, as part of the French initiative Choose Africa, and on projects with climate co-benefits.
Equity Bank, the second largest bank in Kenya, is known for its continued support to the private sector and its commitment to SMEs, women entrepreneurs and rural areas through dedicated products. Its continued support to entrepreneurs, who are particularly affected by the economic shock, testifies to the bank’s commitment to empower Kenyans socially and economically.
Today’s operation will further support the bank’s dedication to staying Kenya’s leader in SME financing and its ambition to better support underserved segments, in particular agriculture, as well as companies contributing to the country’s “Big 4” developmental agenda: manufacturing, affordable housing, health and food security.
This project will thus contribute to the French initiative Choose Africa, which ambitions to dedicate €2.5 billion to start-ups and SMEs in Africa by 2022 through the AFD Group (Proparco and is mother company AFD).
It will also contribute to the AFD Group’s contribution to the climate and the Paris agreement since $20 million of the $100 million loan will be dedicated to financing projects with climate co-benefits.
A strategic partnership for job creation and sustainable development
In total, this project is expected to support about 240 MSMEs and more than 5,000 direct and indirect jobs over the coming years.
This is Proparco’s second operation with Equity Bank Kenya after an initial $22.8 million loan granted in 2019 as part of a broader financing of USD 100m arranged by the German DFI, DEG.
Commenting on this operation, AFD Group’s CEO Remy Rioux said: “AFD Group is delighted to work once again with Equity Bank, whose dedication to SMEs in Kenya make it an important partner of the French initiative Choose Africa. This operation illustrates that AFD, through its subsidiary Proparco, is more than ever committed to empowering Kenyan entrepreneurs confronted with the challenges raised by the Covid-19 crisis while pursuing its fight against climate change in Africa by specifically dedicating $20 million of the $100 million loan to financing projects with climate co-benefits.”
In making the announcement, Dr. James Mwangi, Managing Director and CEO of Equity Group Holdings Plc. stated that, “The impact of the COVID-19 pandemic started as a health crisis, which quickly became an economic crisis and humanitarian crisis that has seen almost 40% of Kenyan small business owners effected by the Great economic shutdown in business. Equity’s goal, is to keep the lights of the economy on so as to to support lives and livelihoods and as the economy begins to open up, our partnership with Proparco will help us to support quick recovery of their businesses and most importantly their growth out of the crisis.”