Equity, IFC in Sh19bn deal to support SMEs


The new Kenyan bank notes. AFP PHOTO

Equity Group and the International Finance Corporation (IFC) have signed a 19.2 billion ($165 million) to support micro, small and medium-sized businesses (MSMEs).

Out of the $165 million, IFC has committed Sh5.8 billion ($50 million), British International Investment (BII) Sh5.8 billion ($50 million) and Sh7.6 billion ($65 million) from Symbiotic, Responsibility and FMO, the Dutch entrepreneurial development bank.

Under Equity’s Africa Recovery and Resilience Plan, the Group will finance at least 5 million MSMEs and 25 million households through its regional banking subsidiaries, targeting to create 50 million direct and indirect jobs.

“As Equity Group, we are delighted to welcome IFC, a member of the World Bank Group to the Equity family as our second-largest shareholder,” Equity Group MD and CEO James Mwangi said.

"With IFC’s reach as the largest global development institution focused on the private sector equity, we will be able to further advance economic development by empowering and catalysing the transformation of the lives and livelihoods of the African people and will enhance the success and sustainability of Equity’s ‘Africa Recovery and Resilience Plan’.”

Equity’s plan is built on five key pillars hinged on two prongs: the social engine and the economic engine.

Equity said it will continue investing in the social transformation and environmental impact of communities within East and Central Africa to drive inclusive growth.

“Supporting small businesses, digital financial services and climate-friendly projects is central to IFC’s strategy in Africa to help create jobs, respond to climate change, and leverage the opportunities afforded by the digital economy,” IFC risk and finance vice president Mohamed Gouled said.

"IFC’s deepening partnership with Equity Group reflects that strategy and will support economic growth in Africa as the continent recovers from the effects of the COVID-19 pandemic."

This new agreement comes after the Group's Democratic Republic of the Congo subsidiary signed a Sh5.8 billion ($50 million) credit facility with IFC to support the o MSMEs.

In January 2021, Equity Group also signed a Sh11.6 billion ($100 million) loan facility with UK’s CDC (now BII) Group, and the Netherlands FMO (which included Germany’s DEG) to help small businesses recover from the Covid-19 pandemic.

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