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AFDB's Donald Kaberuka[/caption]
The African Development Bank (AfDB) has approved a US$ 148- million multisector senior line of credit to Equity Bank Limited of Kenya for on-lending to key economic sectors in the country.
The LOC approved by the AfDB Board in Abidjan on Wednesday 5 November 2014 is expected to further leverage Equity Bank’s capacity to deepen its lending activities to vital economic sectors such as manufacturing, agribusiness, transportation, financial services, telecommunications, construction and energy.
According to papers presented to the Board, Equity Bank Limited was worth KES 238 billion (US$ 2.9 billion) in total assets and KES 50.7 billion (US$ 580 million) in equity as at 31 December 2013 and 158 branches across Kenya, Equity Bank is one of the largest banks in Kenya making up just under 10% of total bank lending. With over 8.4 million customers, Equity Bank Group is also at the forefront of the financial inclusion efforts of the country and closely associated with the empowerment of the traditionally unbanked.
In 2013, Equity Bank provided over 170,000 loans to SMEs totaling over KES33B (US$380million). The Group includes subsidiaries in Rwanda, Tanzania, Uganda and South Sudan which make up just 10.6% of Group net interest income and 14% of Group assets.
The LoC will ensure that Equity Bank can continue to finance projects of strategic important to the country’s development agenda by supporting the expansion of credit to SMEs with the associated benefits in private sector development, inclusive growth, increased employment and higher government tax revenues.
Equity Bank Group includes subsidiaries in Rwanda, Tanzania, Uganda and South Sudan which make up just 10.6% of its net interest income and 14% of Group assets.
The Line of Credit to Equity Bank is well aligned with both the Kenya Government’s and the Bank’s priority areas. It will enhance SME access to finance therefore contributing to their growth and development and contribute to helping Kenya further its growth and development aspirations.
AfDB’s funding will contribute to diversifying and lengthening the maturity profile of Equity Bank’s funding and enhance its ability to extend medium to long-term financing to viable projects and borrowers. The provision of foreign currency resources for on-lending to entrepreneurs importing dollar-priced machinery and equipment also fosters additionality by providing a natural foreign-currency risk hedge.
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this is excellent news – it is totally amazing how Equity gets things done – from a bankruptcy housing finance business to a multi-billion-dollar bank – kudos to James Mwangi