Kenya’s Equity Bank Group and International Finance Corporation (IFC) member of the World Bank Group have teamed up to support lending to small and medium businesses, agricultural projects and women entrepreneurs in east Africa, the IFC said Thursday.
The IFC has thus extended a 100 million U.S. dollar loan to support the growth of Equity Bank Group’s lending portfolio in Kenya, Uganda, Tanzania, South Sudan and Rwanda as the bank focuses on extending inclusive financial services especially to the underserved populations in the region.
“Small and medium businesses, agribusiness and women entrepreneurs can catalyze growth in African economies, but they face challenges gaining access to finance,” Jean Philippe Prosper, IFC Director for East and Southern Africa said in a statement issued in Nairobi.
Prosper said IFC’s partnership with Equity Bank would extend banking services to these underserved entrepreneurs, helping to build businesses and create jobs, both in Kenya and in east Africa as a whole.
The regional financial institution recently expanded its regional footprint with an ambitious strategy to facilitate the Rwandese government’s bid to ensure that 80 percent of its population is banked by the year 2020 while inculcating a savings culture.
To support its Rwanda foray, the bank has invested more than 12 million dollars in the Rwanda setup. The bank has also already moved to align its operational and growth plans along the Rwanda government’s Vision 2020 development strategy.
In an effort to broaden financial access and deepen financial inclusion, Equity Bank has also been rolling out agency banking in Kenya. These new channel is giving small businesses and rural entrepreneurs easy access to financial services.
“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,” Equity Bank Group CEO Dr. James Mwangi said.
Mwangi said a significant barrier to the growth of the SME sector, most of which are owned by women and the youth, is lack of access to affordable credit.
“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,” he said.
Through access to credit, SMEs, he said, are expected to expand their businesses, increase savings, and ultimately reduce unemployment.