Capital Markets

Equity gets Sh5bn Dutch loan for SMEs lending


Equity-centre

Equity Centre in Nairobi upperhill. FILE PHOTO | NMG

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Summary

  • The facility has been disbursed under FMO’s financial program dubbed NASIRA that supports young, female, and migrant entrepreneurs in Sub-Saharan Africa.
  • The European Union- backed programme’s scope was widened in April last year to also reach small Covid-19 affected entrepreneurs in the region.

Equity Bank Kenya #ticker:EQTY has secured $50 million (Sh5.48 billion) from the Dutch Development Bank (FMO) for onward lending to small and medium-sized firms hit by the Covid-19 pandemic.

While announcing the long-term funding, whose interest rate was not disclosed, FMO said the facility would uplift Equity Bank’s lending to the perceived risky small enterprises, who have been hard hit by the economic effects of the pandemic – lowering their ability to save and tap loans.

“We are very happy to be able to support Equity Bank Kenya in weathering the Covid-19 storm. Funding for MSMEs is essential in lessening the impact of the pandemic on people’s livelihood and their communities,” said FMO chief executive Linda Broekhuizen.

“Together with the Capacity Development Project we are confident small entrepreneurs will get much needed support.’’

The facility has been disbursed under FMO’s financial program dubbed NASIRA that supports young, female, and migrant entrepreneurs in Sub-Saharan Africa.

The European Union- backed programme’s scope was widened in April last year to also reach small Covid-19 affected entrepreneurs in the region.

“It will enable small business owners to access affordable loans through local banks, microfinance institutions and other non-banking financial institutions,” said the EU Ambassador to Kenya, Simon Mordue.

NASIRA uses guarantees to allow local banks to on-lend to underserved entrepreneurs.

Kenyan banks have in recent years taken substantial loans from global funds, including the International Finance Corporation (IFC), European Investment Bank (EIB), Agence Française de Développement (AFD) and the African Development Bank (AfDB), attracted by relatively more favourable terms of debts like lower interest rates and longer maturity.

In addition to getting more capital to buffer their books, they have also been restructuring loans in order to protect the quality of their balance sheets, given the problems borrowers have faced in servicing debt due to the Covid-19 hit.

Emci-Hub Technologies Ltd

By Prof. Joel Barasa

The Catholic University of Eastern Africa (CUEA) Faculty of Computer and Informatics, School of Science P. O. Box 62157-00200 Nairobi -Lang’ata Main Campus Email: joel@emcihubtechltd.co.ke Phone: +254705451853/+254769257365 LinkedIn: https://www.linkedin.com/in/joel-barasa-4a3a9a128/ GitHub: https://github.com/Barojoel Websites: https://emcihubtechltd.co.ke and https://estore.emcihubtechltd.co.ke Mr. Barasa I. Joel is a Kenyan citizen by birth. He is currently an adjunct lecturer and an IT specialist in Curriculum studies in the Catholic University of Eastern Africa (CUEA). Mr. Joel holds Post Graduate Program (EPGP) in Data Science, Business Analytics & Big Data in association with IBM which is India's first and the best Masters in Data Science from mUniversity, Aegis School of Business, Data Science, Cyber Security & Telecommunication. He also holds a Degree in BSc. Information Technology from the University of Kabianga, a Professional Certification CCNA and Data Analysis from the University of Kabianga. Joel is senior Software Developer with over 5 years worked on many projects like Kenbright Insurance, Rongo University eLearning portal, participated in integration of DHIS2 health IT systems at Kericho District Referral Hospital and served as H.O.D ICT department Okame college. Joel is an assessor and verifier in TVET CDACC curriculum implementation.

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