Equity Group to Lend Funds to African Businesses

[Photo: Capital FM]

Equity Group says it will lend 6 billion dollars to five million businesses affected by the Covid-19 pandemic in Eastern and Central Africa.

The businesses largely comprising Micro, Small and Medium Enterprises (MSMEs) will create 50 million direct and indirect jobs, as the ecosystems of business become more cohesive, connected, and ultimately synergize and grow.

Equity Group Managing Director James Mwangi says Kshs 678 billion will be available to 5 million MSMEs and 25 million individual borrowers for the next 5 years.

The recovery plan will focus on businesses in agriculture, manufacturing and logistics.

According to Mr. Mwangi, the recovery plan will have a special focus on the youth supporting them to be the primary drivers of creating and expanding opportunities in the real economy. 

“To ensure that no one will be left behind, lending to young people will be complemented with credit guarantee facilities to mitigate default through our credit risk pricing model that has opened inclusive credit access to all. Risk based credit pricing has enabled us to adopt a transparent, all-inclusive interest rate, at the current average central bank rate that ranges from 13% to 18.5% for the lowest risk and the highest risk categories respectively,” he said.

The Regional Development Plan through recovery and resilience initiatives focuses on five thematic areas which are: Primary sectors of Food and Agriculture and extractive sectors, Manufacturing and Logistics, Trade and Investments, Micro small and medium enterprises, and Social impact and Environmental investments.

Equity Group further says it has internal capacity to lend 4.5 billion dollars supported by customer deposits.

This follows its partnership with development finance institutions which have provided 1.5 billion dollars to be lent to small businesses.

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