AfDB Signs Line of Credit Agreement with Equity Bank Kenya Ltd. to Boost Private Sector Development

African Development Bank (AfDB) and Equity Bank (Kenya) Limited (Equity) have signed an agreement for a US $148-million multi-sector senior Line of Credit to facilitate onward lending to key economic sectors in Kenya.

The Line of Credit (LoC) extended to Equity Bank Kenya by AfDB is expected to boost Kenya’s private sector development through financing of projects that are strategically important to the country’s development agenda.

Speaking during the signing session, Equity Bank Managing Director and CEO Dr. James Mwangi confirmed that the funds would be availed to Micro, Small and Medium Enterprises seeking business related growth loans in both local and foreign currency.

“The LoC from AfDB will deepen Equity Bank’s lending capacity to vital economic sectors such as manufacturing, agribusiness, transportation, financial services, telecommunications, construction and energy,” Dr Mwangi explained.

Equity Bank is one of the largest banks in Kenya. It is at the forefront of the financial inclusion in the country and is closely associated with the empowerment of the traditionally unbanked, with a special focus on the credit needs of micro, small and medium enterprises.

During the ceremony, the African Development Bank’s Director for the Eastern Africa Regional Resource Centre, Mr. Gabriel Negatu, noted that the LoC to Equity Bank is well aligned with the priority areas of the Kenyan Government, the African Development Bank and Equity Bank.

“The proposed project is perfectly aligned with structural transformational themes espoused in the 2013-2022 Ten Year Strategy of the Bank which identifies a number of core operational areas for intervention in support of the objective of assisting African countries attain more inclusive growth and gradually transitioning to green growth”, said Mr. Negatu.

AfDB’s funding will contribute to diversifying and lengthening the maturity profile of Equity’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 additionally by providing a natural foreign-currency risk hedge.