International Finance Corporation (IFC), a member of the World Bank Group, today extended a Kshs 8.3 billion ( US$100 million) loan to Equity Bank Group to lending to small and medium businesses, agricultural projects and women entrepreneurs in the region.
The financing will support the growth of Equity Bank Group’s lending portfolio in Kenya, Uganda, Tanzania, South Sudan and Rwanda. Equity Bank Group focuses on extending inclusive financial services especially to the underserved populations in the region.
“IFC’s credit line will enable Equity Bank Group to increase its lending program to small and medium enterprises and support agriculture and women-led projects in the region. Thanks to this new loan, we will build on our achievements, especially deepening financial inclusion in East Africa”, said Dr. James Mwangi, CEO of Equity Bank Group.
He added that a significant barrier to the growth of the SME sector, most of which are owned by women and the youth is access to affordable credit.“Financial exclusion arising from lack of credit access has been the limiting factor affecting potential in SMEs to grow their businesses. This loan facility will not only enable us to offer SMEs affordable credit, but will also stimulate them to focus on regional export markets and match their strategic growth plans with long term funding,” said Dr Mwangi. Through access to credit, SMEs, he said, are expected to expand their businesses, increase savings, and ultimately reduce unemployment.
From its origins as a microfinance bank in 2004, Equity Bank Group is now home to 7.5 million account holders making it the largest bank in the region by customer base. The bank has operations in Kenya, Uganda, South Sudan, Rwanda and Tanzania.
“Small and medium businesses, agribusiness and women entrepreneurs can catalyze growth in African economies, but they face challenges gaining access to finance”, said Jean Philippe Prosper, IFC Director for East and Southern Africa. “IFC’s partnership with Equity Bank Group. will extend banking services to these underserved entrepreneurs, helping to build businesses and create jobs, both in Kenya and in East Africa as a whole.”
IFC’s investment and advisory services have teamed up with nine banks and one microfinance institution in Kenya, to help them sustainably and profitably increase business with small and medium enterprises. In fiscal year 2011 alone, IFC’s work with banks helped provide loans to 18,000 small and medium businesses in Africa.
In an effort to broaden financial access and deepen financial inclusion, Equity Bank has been rolling out agency banking in Kenya. These new channel is giving small businesses and rural enterpreneurs ease of access to financial services. Further, The Bank through Equity Group Foundation in partnership with The MasterCard Foundation has rolled out a 13 week financial literacy program dubbed Financial Knowledge for Africa (FiKA) that has so far benefited over 306,000 people and targets to train one million youth and women in Kenya.The programme is supporting the growth of SME’s as drivers of economic growth by empowering enterpreneurs with knowledge to better manage their businesses.
Equity Bank has been recognised for its work in Microfinance and lending to the SME sector. In 2011, the Bank was named by the Africa Investor as the Best Initiative in Support of SMEs and the Millenium Development Goals. In the same year, the Bank was the only financial services provider named by the World Economic Forum as one of the New Global Sustainability Champions in emerging markets including India, China, Brazil, South Africa and Russia.
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