Equity Group has signed an agreement worth US$ 75 Million (Kes 8.2 Billion) with African Guarantee Fund (AGF) Group to support the Bank scale up its lending activities to Micro, Small and Medium Enterprises (MSMEs) in Kenya, Uganda, Rwanda and the Democratic Republic of Congo (DRC).
The financial support will enable these businesses to recover and thrive in the post-COVID-19 era.
“This agreement will see that MSMEs can access funding at a much lower cost, especially for women,” said Dr James Mwangi, CEO and MD- Equity Group.
Equity Group War Chest
According to Henry Rithaa, CEO of Micro and Small Enterprises Authority, the organization wants to achieve 5 million jobs through various sectors. So the sector that Equity is supporting this facility will assist in achieving this goal.
The facility will enable Equity Group to reschedule loans, allowing MSMEs to recover and start afresh.
Equity Group is the latest lender to establish a fund for MSMEs, with almost all lenders seeking funds to cushion these businesses from the effects of COVID-19.
Dr Mwangi said the essence of this guarantee is to reduce the risk and pricing of lending to businesses. The fund will support loan repayments accommodation-prolong repayment period of up to 3 years for some of Equity Bank customers.
“We are aware that Equity is building a huge financial story and we would like to be part of it,” said Jules Ngankam, CEO of the African Guarantee Fund.
Dr Mwangi said sectors such as agriculture recovered faster while the hospitality industry is expected to recover in about a year; hence, the moratorium was issued based on each sector’s recovery.
The hotel and entertainment industry is still faced with significant challenges brought about by curfew hours.
“The Government’s focus has been creating a conducive environment for growth, including growing infrastructure. We have focused on credit to build liquidity for growth,” said Polycarp Igathe, Chief Commercial Officer, Equity Group.