The European Investment Bank has extended a Sh10.45 billion (95 million Euros) loan to two local banks for financing small and medium sized enterprises (SMEs) in the region.
The European Investment Bank (EIB) yesterday signed a Sh8.25 billion loan with Equity Group Holdings earmarked for three subsidiaries and another one with HFC Ltd at Sh2.2 billion.
Under the Equity kitty, Sh3.96 billion is for Tanzania, Sh2.2 billion for Democratic Republic of Congo and Sh2.09 billion for Uganda.
Equity will also benefit from a Sh220 million technical assistance programme funded by the EIB to support its strategy of transforming its branches into SME business centres.
Earlier, the group had signed a Sh5.5 billion loan facility for Kenya.
“Kenya is increasingly becoming a hub for the region on many levels and we as the bank must look at this from a very basic point of view: there is a young and growing population with enormous potential, you need credit to support that momentum,” said EIB vice president Pim van Ballekom.
Equity Group chief executive James Mwangi said with the new loan the lender will be in a position to support up to 1,000 regional companies with an average loan of nearly Sh10 million each.
This will contribute towards developing local entrepreneurs to compete at regional level furthering integration and cross-border trade.
HFC loan will support the much needed longer-term financing to private enterprises and commercially operated public sector entities in productive sectors.