The European Investment Bank (EIB) has approved a Sh21.2 billion credit line with Equity, I&M and Bank of Africa as part of its efforts to provide financial support to small and medium-sized enterprises (SMEs) in the East African region this year. Robert Schofield, who oversees EIB’s lending for small and medium sized companies in Africa, said the three banks will disburse the money later this year. The announcement was made yesterday when EIB disclosed that it will this year disburse a further Sh27 billion to SMEs which is an enhancement from last year’s Sh10 billion.
“I am pleased to further announce that three additional credit lines for SME lending in East Africa have been approved by the EIB and are expected to be signed later this year,” said Mr Schofield.
“Totalling Sh21.2 billion, these new programmes are expected to support investment by companies in Kenya, Tanzania, Uganda and Rwanda, as well as the DRC and Mauritius.’’
Catherine Collin, EIB’s regional representative, said the lending is aimed at boosting entrepreneurs who will access the funds directly from banks in their respective countries. EIB is Europe’s long-term lending institution, owned directly by the 28 European Union member states.
The bank offers long-term loans to microfinance institutions across the region at a negotiable interest rate with a seven year repayment period. Last year, the EIB signed lending totalling Sh10 billion with various banks and financial institutions across East Africa. This included Sh2.1 billion to Housing Finance to support SME investment in Kenya as well as a Sh3.1 billion deal with KCB for lending across East Africa.
Additionally, a Sh1.6 billion credit line was agreed with EXIM Tanzania and Sh3 billion with Bank of Kigali in Rwanda targeted at supporting 46 firms.