Nairobi, March 15, 2021...
- The USD 75 Million (Kshs 8.25 Billion) Guarantee Fund derisks women owned and managed MSMEs access credit at affordable interest rates so as to recover and thrive in a Post COVID-19 Environment
- The facility extends support to Equity Bank Kenya and three of the Group’s subsidiary operations in Rwanda, Uganda and DRC
- The Kshs 8.25 Billion facility comes on the heels of a US $100 Million (Kshs 11 Billion) Credit Facility with Leading European Development Banks (DEG, CDC, FMO) two weeks ago.
The African Guarantee Fund (AGF) and Equity Group Holdings Plc have signed an agreement which will provide a USD 75 Million (Kshs 8.25 Billion) guarantee fund to four of Equity’s bank subsidiaries within the Group. The facility is earmarked to support Equity to scale up its lending activities to women owned and managed Micro, Small and Medium Sized Enterprises in Kenya, Uganda, Rwanda and DRC, ensuring women are able to access credit at affordable interest a time when its most needed.
Speaking during the signing ceremony, Dr. James Mwangi, Managing Director and CEO of Equity Group Holdings stated that, “With this facility from African Guarantee Fund, whom we share a mission of supporting women MSMEs, we will be strongly positioned to continue to offer our customers particularly women in business access to funding at a time when the COVID-19 pandemic continues to impact negatively on businesses. Women MSMEs are key players in driving livelihoods for the majority of families, communities and growth of the economy. This support in the form of a guarantee fund will mitigate the credit risk Equity is exposed to as we continue to work with women MSMEs to navigate through these uncertain times and keep the lights of the economy on. This will ensure livelihoods and opportunities within the economy continue to accelerate as we revitalize economic activities to enable the economy to bounce back amidst the rollout of the vaccine. Our commitment is to continue working with MSMES to finance them to recover and thrive, and where necessary transform and adapt their businesses to the changing environment and seize new business opportunities.”
In response to the COVID-19 crisis, Equity launched an offensive and defensive approach to support customers to sustain themselves while innovating alongside MSMEs who are leveraging on the opportunities that have presented within the crisis. The Group committed to loan repayment accommodation for up to 45% of the customers whose cashflows and operation cycle were deemed likely to be negatively impacted during the COVID-19 pandemic. Equity made the prudent decision to ensure cashflow was not impaired and in its third quarter 2020 results, reported a 30% growth in its loan book in support of its customers who saw opportunities of green shoots and diversifications in the COVID-19 environment. Most of the new opportunities funded were in manufacturing of PPE’s, logistics, online businesses, agro-processing, fast moving consumer goods and agriculture value chains.
Equity’s prudent approach to conserving its cashflow and supporting MSMEs through the COVID-19 crisis has provided confidence to its lending partners.
AGF Group CEO Jules Ngankam said, “Our partnership with Equity Group is of great significance to the economies of Kenya, Rwanda, Uganda and the DRC given our mutual focus on the SME sector which has massive potential to drive economic growth. This partnership will also foster sustainable development particularly for women-led/owned businesses who will be supported under our Affirmative Finance Action for Women in Africa initiative and green business who will be supported under our Green Guarantee Facility. Working with Equity Group indeed provides us with a broad opportunity to create impact alongside their various initiatives.”
This is the fifth tranche for Equity Group after having signed a $50 million USD (Ksh 5.5 Billion) loan facility with IFC in September; a $100 million USD (Ksh 11.0 Billion) from Proparco in October and a EUR 125 million (Ksh 16.5 Billion) loan facility signed two weeks ago with the European Investment Bank and a US $100 Million (Ksh 11 Billion) Credit Facility with Leading European Development Banks DEG, FMO and CDC-UK to fortify credit flows and liquidity to MSMEs totaling Ksh 52.25 Billion.
Jules Ngankam, CEO, African Guarantee Fund (left) and Dr. James Mwangi, MD & CEO, Equity Group Holdings Plc display signed partnership agreement. Equity Group Holdings has signed a partnership agreement with African Guarantee Fund for a guarantee facility of Ksh. 8.25 Billion shillings to ensure Equity can support businesses on the path to recovery as they get back to their normal operations.
(From left) Frank Adjagba, African Guarantee Fund Group Director of Business Development; Jules Ngankam, African Guarantee Fund CEO; Dr. James Mwangi, Equity Group Holdings MD & CEO and Christine Browne, Equity Group Director, Legal Services and Company Secretary during the signing of agreement for a Kshs 8.25 Billion facility.
About Equity Group Holdings, Plc:
Equity Group Holdings (EGHL) is a Pan-African financial services holding company listed at the Nairobi Securities Exchange, Uganda Securities Exchange, and Rwanda Stock Exchange. The Group has banking subsidiaries in Kenya, Rwanda, Uganda, South Sudan, Tanzania, and DRC and a representative office in Ethiopia. It has other subsidiaries in investment banking, insurance, telecom, fintech and social impact investments. Equity Group has an asset base of over $10 billion. With over 14.2 million customers, the Group is one of the biggest banks in customer base in the region. Since 2008, the Group’s corporate foundation, Equity Group Foundation (EGF), has delivered humanitarian programs in Education and Leadership, Food and Agriculture, Social Protection, Health, Clean Energy and the Environment, Enterprise Development and Financial Inclusion to millions of Africans. EGF has a networked health care provider, Equity Afia which has been supporting COVID-19 relief efforts. About the African Guarantee Fund
African Guarantee Fund is a non-bank financial institution whose objective is to promote economic development, increase employment and reduce poverty in Africa by providing financial institutions with guarantee products and capacity development assistance specifically intended to support SMEs in Africa. African Guarantee Fund was founded by the government of Denmark through the Danish International Development Agency (DANIDA), the government of Spain through the Spanish Agency for International Cooperation and Development (AECID) and the African Development Bank (AfDB). Other shareholders include French Development Agency (AFD), Nordic Development Fund (NDF), Investment Fund for Developing Countries (IFU) and KfW Development Bank (KfW). AGF has a rating of AA-by Fitch Ratings Agency.
For more information, please visit : www.africanguaranteefund.com