Equity Bank group, led by Kenyan James Mwangi, is offering extensive assistance to boost the private sector in the six East African countries in which it operates.
Equity Group will support SMEs in East and Central Africa’s agriculture, manufacturing and logistics, trade and investment, social and environmental sectors with its Regional Economic Recovery and Resiliency Stimulus Plan over the next five years.
There will be a $6bn (€5.5bn) package, which is almost 70% of Equity’s total balance sheet in 2020. As of 31 December 2020, the group had a total balance sheet of about $9bn.
Equity Group’s CEO first discussed this “ambitious plan to advance the African continent” more than a year ago, when the group obtained the support of a dozen financial partners.
“This recovery and resilience plan is a kind of Marshall Plan, in which we commit $6bn to support the continent’s industrialisation by helping SMEs and creating 50 million direct and indirect jobs in our countries of operation over five years,” Mwangi said.
In addition to its affiliates in Kenya, Uganda, South Sudan, Tanzania, Rwanda, and the Democratic Republic of the Congo, the bank holding company has a representative office in Addis Ababa, Ethiopia.
In a statement released on 7 March, Equity said the loans would be disbursed at an interest rate of 13% to 18.5%.
Through the loans, Equity hopes to help businesses recover from the health, social, humanitarian and economic effects of the Covid-19 pandemic.
The $6bn facility will target five million businesses and 25 million individuals and will be geared toward youth and women in particular.
To implement the plan and support the economies in which it operates, East Africa’s leading bank relies on two pillars: a strong liquidity position and support from international lending institutions.
Since the beginning of the health crisis, Equity Group has seen its liquidity level increase significantly, as have many of its competitors’ banking groups that are supported by central banks.
In the year ending 31 December 2020, the bank had a liquidity ratio of 59.3%, an increase of 52.1% compared with a year earlier, giving it more freedom to interact with its clients, particularly borrowers.
Aside from the World Bank, the International Finance Corporation (part of it), the African Development Bank (AfDB), the European Development Banks (Team Europe), the Commonwealth Secretariat, and the African Continental Free Trade Area Secretariat (AfCFTA) have also pledged support and participation to the Kenyan bank.
Equities is also receiving assistance from the national governments of the six countries where it operates.
