DEG arranges loan of USD 100 million for Kenya’s Equity Bank
In its role as an experienced development financing partner DEG – Deutsche Investitions- und Entwicklungsgesellschaft mbH, is particularly in demand during the current COVID-19 pandemic. Hence it has now syndicated an additional long-term loan amounting to USD 100m for Kenya’s Equity Bank (EBK) and is itself providing USD 25m of the total amount. Further investors are the Dutch development finance institution FMO and Britain’s CDC, which provided USD 37.5m each.
This new financing will allow EBK to expand its lending operations to small and medium-sized enterprises. In addition, it will be used to actively assist bank customers, for example in bridging liquidity gaps resulting from the current pandemic. SMEs are EBK’s most important customer group.
Commenting on the transaction, Christiane Laibach, CEO of DEG’s Management Board, said: “DEG is delighted to realise a further financing for Equity Bank, together with our European partners CDC and FMO. Through our cooperation we are contributing to supplying local SMEs with loans which are particularly important and in demand at present".
Dr. James Mwangi, Group Managing Director and CEO of Equity Group Holdings Plc, explained: “The COVID-19 pandemic started as a health crisis, which quickly became an economic and humanitarian crisis that has seen almost 40% of Kenyan small business owners affected. Equity’s goal is to keep the lights of the economy on to sustain lives and livelihoods and facilitate the recovery of businesses as the economy begins to reopen. We value our partnership with DEG, FMO and CDC in our efforts to support MSMEs to stimulate the economy back to vibrance”.
This is already the second large-volume loan for EBK arranged by DEG as lead investor. Equity Bank, the second largest bank in Kenya, is one of the digital pioneers of the Kenyan financial sector. Around 80 per cent of its transactions are already processed via mobile banking. Many of its clients are located in rural areas.
In addition to financing companies directly, DEG reaches numerous small and medium-sized enterprises in developing countries via local banks. In doing so, more than 2 million SMEs in developing countries gain reliable access to capital with DEG support. This at the same time allows local companies to develop and invest – an important contribution to achieving the UN’s global Sustainable Development Goals (SDG).
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