On Wednesday, 3 March 2021, Kenya’s Equity Group Holdings announced the launch of a lending facility worth 75 billion Kenyan shillings ($684.62 million) targeting Small and Medium Enterprises (SMEs). The goal is to boost the activities of SMEs in the country after the economic impact of the COVID-19 (coronavirus) pandemic. The facility would make funds available for businesses as the bank understands that many of them have exhausted their working capital as a result of the pandemic.
At a news conference in Nairobi, James Mwangi noted that for the SMEs that have been out of business for a year, working capital has been depleted. James Mwangi is the Group Managing Director and Group Chief Executive Officer of Equity Group Holdings Plc . The banking conglomerate has one of the largest customer bases on the African continent with over 14 million customers as of December 2019.
Like in most societies, SMEs spearhead the creation of employment while driving economic expansion. According to a report , 80 percent of jobs created in the Kenyan market in 2014 where dominated by SMEs. The informal sector is estimated to constitute 98 percent of business in Kenya, contributing 30 percent of jobs and 3 percent of Kenya’s GDP.
Three months into the global lockdown triggered by the pandemic, Kenya recorded over a million job losses. The pandemic crippled its tourism, manufacturing and agric sectors which account for employment and economic activities.
Before the pandemic struck, small businesses were already plagued by a number of challenges in the Eastern African country. Some of these include limited financial support, poor management, corruption, lack of training and experience, poor infrastructure, and insufficient profits. The latest facility will, therefore, make finance available for small businesses to pick up while reviving the economy.