AfDB commits $150M to Equity Bank to expand Kenyan SME lending
What's the deal? The African Development Bank GroupDealroom has a profile for this one. Try Dealroom → has approved a $150 million subordinated loan to Equity BankDealroom has a profile for this one. Try Dealroom → Kenya to strengthen its capital base and expand financing for small and medium-sized enterprises. The board approved the eight-year facility, which carries a five-year grace period, on October 30.
What's the endgame? Equity already serves roughly 1.9 million SME clients nationwide. By 2030, AfDB expects the money to support about 9,000 new SME loans, with a focus on women- and youth-led businesses in agriculture, manufacturing, trade, logistics, and green sectors.
Why now? SMEs contribute more than 30% of Kenya's GDP and employ over 80% of its workforce, yet many struggle to access long-term credit. The loan supports Equity Bank Kenya's wider $500 million capital-raising initiative.
"Small businesses are the backbone of Kenya's economy, yet too many entrepreneurs lack the financing needed to turn their ambitions into thriving enterprises," said Ahmed Attout, director of financial sector development at the African Development Bank.
The extras: The investment comes with up to $250,000 in technical assistance through the bank's Affirmative Finance Action for Women in Africa initiative, plus up to $900,000 in non-financial support via its SME Credit Catalyst Program. Both aim to build business advisory services and tailor products to women and young entrepreneurs.
What could go wrong? The deal addresses a persistent gap rather than closing it. Recent reporting points to limited MSME access to bank credit and lending rates still around 14%.
The signal: The loan is part of a competitive push to channel development-finance capital through Kenyan banks. AfDB recently announced a $60 million trade-finance guarantee for Equity, IFC-backed risk-sharing deals are expected to mobilise about $144 million in SME lending across Equity, KCB, and 4G Capital, and KCB secured a separate $100 million EBRDDealroom has a profile for this one. Try Dealroom → credit line for underserved MSMEs.
Read more: allafrica.com
Image credit: US Army Africa
