Equity bank Group CEO, James Mwangi, (center), Equity Group director stateegy, Brent Malahay (left) and Equity Group chief commercial officer Polycarp lgathe, during the launch.
Equity Group Holdings has unveiled Kshs. 678 billion credit scheme targeting at least five million small and medium enterprises within the region.
The Regional Private Sector Economic Recovery and Resilience Stimulus package which is equivalent to 60% of the bank’s asset base is intended to support SMEs in agriculture, manufacturing, trade, and investment in the eastern and central region in the next five years.
Equity Group CEO Dr. James Mwangi says the loans will be disbursed at an interest rate 13-18% as the bank seeks to support businesses to thrive and recover from the devastating health, social, humanitarian, and economic impacts of the COVID-19 pandemic.
Covid-19 social-economic disruption negatively hurt small businesses, with those in Kenya suffering the most compared to her economic rivals South Africa and Nigeria.
This is according to the latest Africa SME Pulse Report by GeoPoll that shows More than 70% of the Micro Small and medium enterprises were forced to close their businesses at least temporarily due to the pandemic, of which only 17% have fully resumed normal operations.
It further shows only 11% of small businesses have received bank loans, illustrating the difficulties MSMEs face securing financing.
Dr. Mwangi added that the facility will be made available to 5 million MSMEs and 25 million individual borrowers for the next 5 years at the rate of 13% to 18.5% for the lowest risk and the highest risk categories respectively.
The recovery plan will have a special focus on youth and women as it seeks to leverage on productive capacities and comparative advantages to transform the region into a manufacturing hub that converts agricultural raw material into finished products for export and national use.
Mwangi noted that the plan will bring together social & Economic dimensions of the economy with the intention of industrializing Africa.
By Fred Azelwa.