Providing loans for SMEs in Kenya

Equity Bank Kenya is a fully-fledged commercial bank and part of the largest financial group in East Africa. In Kenya, the bank offers a wide range of financial products for private and commercial customers. With a fully digitalised private customer business and around 80 percent of transactions being processed via mobile banking, Equity Bank is a pioneering force in the Kenyan financial sector. One key area for the banking business is stimulating domestic business, particularly small and medium-sized enterprises (SMEs).

Even though Kenya is one of the driving economic forces in the region, many local SMEs have no access to the long-term loans they need to take their operations to the next level. By expanding its SME business, Equity Bank is helping to remedy this shortcoming. Together with other development finance providers, DEG is supplying it with debt capital for growing its SME business.

DEG arranged a USD 100 million long-term loan for Equity Bank Kenya in 2019, providing USD 27.5 million itself. Participants in this financing are the French development bank Proparco, the Swedish development financier Swedfund, the Norwegian development finance institution Norfund, the European Financing Partners (EFP) and the EB-SME Finance Fund Emerging Markets. This was followed at the end of 2020 by another loan arranged by DEG and supported by the EB-SME Finance Fund Emerging Markets for USD 100 million, with DEG contributing EUR 25 million. These funds enabled Equity Bank Kenya to expand its activities providing loans to local small and medium-sized enterprises. This now accounts for almost 60 percent of its overall business. The bank is also an important partner for many customers during the pandemic, helping them to remain liquid and safeguarding local jobs during and after the crisis.