Equity Group Gets $700M Boost From Africa Guarantee Fund for MSME Support

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  The International Finance Corporation (IFC) has provided Equity Group with KSh 64 billion to boost its loans for micro, small, and medium-sized enterprises (MSMEs) within Kenya.
  
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  This financial support ranks as one of the most substantial credit lines ever extended to the bank, which also has operations in Rwanda, Uganda, Tanzania, and several additional nations.
  
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  The prior collaboration between AGF and Equity has successfully facilitated more than $160 million in loans for approximately 2,000 MSMEs, encompassing around 500 enterprises led by women and about 900 run by young entrepreneurs.
  

Boniface Kanyamwaya, who works as a journalist for Farovint.co.ke, boasts over a decade of experience in areas such as finance, economics, business, markets, and aviation. He offers valuable analysis on both Kenyan and international developments.

Equity Group has been awarded $500 million (KSh 64 billion) in guaranty funds from the Africa Guarantee Fund to facilitate loans for Micro, Small, and Medium Enterprises (MSMEs).

This new establishment will allow Equity Group to expand its loan offerings to MSMEs, thereby releasing up to $1 billion (KSh 129 billion) in funding for such enterprises.

It is anticipated that this initiative will generate or support more than 50,000 jobs.

This enhanced collaboration with the Africa Guarantee Fund reinforces our joint commitment to bolstering MSMEs, which form the cornerstone of African economies. Through improved financial accessibility and advocacy for environmentally friendly business operations, we are contributing to the prosperity of local communities, safeguarding employment, and fostering comprehensive economic development throughout the area.

“We have a distinctive chance to intensify our concentration on high-impact small and medium-sized enterprise sectors such as agriculture, businesses led by women and young people, amongst others. This aligns with our Africa Recovery and Resilience Plan (ARRP) that highlights the importance of collaboration and strategic alliances for fostering significant development,” stated Equity Group’s Managing Director James Mwangi in a press release dated Friday, May 9.

It isn’t the first instance of AGF providing support for Equity Group’s guarantee financing. Back in 2020, the financial institution was granted $75 million (KSh 9.7 billion).

This refreshed collaboration marked the biggest single assurance commitment in AGF’s history.

The bank stated that the financing will be aimed at supporting MSMEs in Kenya, Uganda, Rwanda, Tanzania, and the Democratic Republic of Congo (DRC). They also plan to expand this reach to additional Equity Group subsidiaries within the coming ten years.

The bank has played a crucial role in backing enterprises in Kenya. Previously, it has offered multiple credit facilities to help these businesses expand their activities throughout its market areas.

“Through our strengthened collaboration with Equity Group, we aim to expand both our presence and influence within the area. This alliance will help the bank boost SME funding, leading us toward various developmental outcomes such as an increase in employment rates among business owners and fostering enterprise progression—from smaller entities evolving into larger ones like transitioning from small to medium-sized firms,” stated Jules Ngankam, CEO of AGF Group, in a distinct announcement.

Equity Bank reduces lending charges

Equity Bank followed the guidelines set by the Central Bank of Kenya, reducing its shilling-denominated loan fees by 300 basis points to 14.739%.

The central bank requested commercial banks in Kenya to decrease the base lending rate by 50 basis points to 10.75% in February 2025.

The CBK called upon all commercial banks to adjust their loan interest rates with the aim of encouraging more private borrowing and boosting overall economic development.