Equity Group MD and CEO James Mwangi Equity Bank has entered into a partnership with the Netherlands FMO development bank with the signing of a NASIRA loan portfolio guarantee facility.
The $50 million (Sh5.5 billion) facility is the second NASIRA guarantee signed with Equity with the support of EU funding.
With the funding, Equity Bank Kenya will further support Kenyan entrepreneurs during these challenging times with a special focus on micro, small and medium enterprises (MSMEs), it said in a statement on Thursday.
The FMO funding will provide a NASIRA loan portfolio guarantee covering loans provided to MSMEs affected by the Covid-19 crisis, including women and young entrepreneurs and companies in the agri-value chain.
The guarantee mitigates Equity’s risk in the MSME segment which has heavily borne the brunt of the pandemic. This facility among others that Equity has signed will assist us to support MSMEs and keep the lights of the economy on as we look forward to the economy bouncing back with the development and rollout of the vaccine "Equity is committed to continue supporting businesses to survive, recover and thrive post CovidD-19 pandemic so as to protect lives and livelihoods,"Equity Group MD and CEO James Mwangi said.
He noted that MSMEs are key players in driving the growth of the economy and with the support support, in form of guarantee from its partners, FMO, will mitigate the risk Equity is exposed to as it continue to work with MSMEs navigate through current uncertainty.
He said some MSMEs require more funding as they re-purpose their businesses while others require accommodation in loan repayments.
"This facility among others that Equity has signed will assist us to support MSMEs and keep the lights of the economy on as we look forward to the economy bouncing back with the development and rollout of the vaccine,”Mwangi said.
The NASIRA guarantee will be complemented with a bespoke Capacity Development project aimed at supporting Equity’s offering towards companies and smallholder farmers in the agricultural value chains with a target to grow the Agriculture segment of Equity’s loan book to 30 per cent.
The technical assistance will help in strenghtening the lender’s value proposition regarding financial and non-financial products and services for these customer segments.
Linda Broekhuizen, CEO (a.i.) of FMO said:“Funding for MSMEs is essential in lessening the impact of the pandemic on people’s livelihood and their communities. Together with the Capacity Development project we are confident small entrepreneurs will get much needed […]