The African Development Bank and Equity Group Holdings (EGH) have signed a $100 million loan facility to finance the expansion of the commercial bank across the Eastern and Central Africa.
The loan facility provides an ideal financing solution to enhance the commercial bank’s ability to serve small and medium enterprises as it continues to grow.
Moreover, the loan is a two-tier facility with a seven-year maturity. Within the timeline of the loan repayment, expectations are to promote EGH’s ability to offer bespoke products to MSMEs.
Also, requirements are to expand its balance sheet and optimize its capital structure across the continent. With keen interest on women and youth entrepreneurs.
Directors of the two organizations speak about the Agreement
Dr James Mwangi, the Managing Director and CEO of Equity Group Holdings indicated that:
“Together with the African Development Bank Group, Equity Group Holdings will be strongly positioned to support MSMEs. To keep their lights on during the prevailing COVID-19 pandemic that has slowed down the economy. [While] impacting on the cash flow of enterprises.
“We have seen the impact of pumping oxygen to our MSMEs during this period. They have emerged more resilient thereby protecting jobs and creating more job opportunities. Through venturing into more innovative initiatives such as manufacturing of internationally certified quality PPEs.”
Stefan Nalletamby, the African Development Bank’s Director for financial sector development also intimated that one of the significant barriers to SMEs in majority of African markets is access to finance. And now, it has become very acute due to the economic fallout of the pandemic.
“Access to finance represents a significant barrier to SMEs in many African markets. One that has sharpened as a result of the ongoing pandemic.” He added that “the timing of the facility could not have been more appropriate. Especially, as businesses seek to remain operational in the midst of a COVID-19 pandemic that is causing financial havoc.”
Stefan Nalletamby also noted that the loan aligns with the Bank’s High-5 strategic objectives. These include improving the quality of life for African people, feeding Africa, to light up and power Africa, and to industrialize Africa.
Equity Group Holdings Operations
The Equity Group Holdings is a pan-African financial services holding company listed on the Nairobi Securities Exchange, Uganda Securities Exchange, and Rwanda Stock Exchange.
The Group has banking subsidiaries in Kenya, Rwanda, Uganda, South Sudan, Tanzania, and Democratic Republic of Congo. It recently acquired BCDC to form Equity BCDC, the country’s second-largest financial services company.
Also, EGH has a representative office in Ethiopia. Equity Group has an asset base of over $10 billion and over 14.2 million customers. And is one of the region’s biggest banks by customer base.
In 2019, the Equity Group Holdings entered into an agreement with a London-Stock Exchange listed firm, Atlas Mara Limited (ATMA). The agreement was to buy out banking units in Zambia, Mozambique, Tanzania and Rwanda.
Since 2008, Equity Group foundation, the Groups corporate foundation has delivered diverse programs to many Africans. These include, humanitarian programs in health, education and leadership, food and agriculture, financial inclusion, and many more to millions of people across Africa.
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