Equity Bank Kenya is set to receive Sh5.66 billion from United Kingdom’s development finance institution for onward lending to small businesses enterprises.
The funds from the British International Investment (BII), formerly known as CDC Group, will help the bank boost business growth as well as the country’s economy.
However, UK’s Minister for Africa, Vicky Ford MP did not give a particular timeline as to when the bank will receive the funds.
“Our economic partnership is delivering impressive results, and we have some ambitious, exciting plans for the future. Plans that will deliver for Kenya, and for the UK, long into our shared future,” he said.
Ford further stated that the UK will increase its support for green manufacturing in Kenya by providing an additional Sh61 million to help Kenya build a green manufacturing industry, increasing its support to the Ministry of Trade and the wider Kenyan manufacturing sector in this area.
The funds will support the growth of small businesses through the provision of guarantees for the bank’s customer loan facilities.
Lenders are tapping into risk-sharing models like SME guarantee from the government and development institutions to limit their risk exposures.
As is the case in emerging and frontier markets, one of the biggest obstacles SMEs face is access to finance.
Addressing this is a priority both for lenders and the government, the latter which has made it a key development policy in its Vision 2030 economic strategy.