Equity Signs Kshs 11 Billion Credit Facility with European Development Banks to Support local MSMEs
Equity Group has signed a Kshs 11 Billion loan facility with Team Europe, Germany’s DEG, the Netherlands FMO and the UK’s CDC Group to support local MSMEs.
The deal which was signed today will support Equity to continue lending to MSMEs to bolster their resilience and growth during the COVID-19 environment and to foster job protection and sustainable economic opportunities.
“The impact of the COVID-19 pandemic started as a health crisis, and quickly became an economic and humanitarian crisis that has seen more than 40% of Kenyan micro, small and medium business owners affected by the great economic slowdown. ‘’ Dr. James Mwangi, Managing Director and CEO of Equity Group said while making the announcement.
‘’Equity’s goal is to keep the lights of the economy on to sustain lives and livelihoods and facilitate the recovery of businesses as the economy begins to reopen. The syndicated facility indicates cross-cutting trust on Equity’s ability to manage a sophisticated financing mechanism. We value our long-term partnership with DEG, FMO and CDC. The three development banks recognize the critical role that Equity plays in promoting access to finance for MSMEs.” he added.
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 cash flows 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, Equity 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 the manufacturing of PPE’s, logistics, online businesses, agro-processing, fast-moving consumer goods and agriculture value chains.
As development finance institutions DEG, CDC Group and FMO invest to support the social and economic development of countries across Africa.
This is the fourth tranche for Equity Group after having signed a Kshs 5.5 Billion loan facility with IFC in September; a Kshs 11.0 Billion from PROPARCO in October and a Kshs 16.5 Billion loan facility signed last week with the European Investment Bank to fortify credit flows and liquidity to MSMEs totaling Kshs 44 Billion.
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