One of Kenya’s leading banks, the Equity Bank and the China Development Bank on Monday announced 4 billion Kenyan shillings ($50 million) support to small and medium enterprises in the country.
The loan facility will be available to SME clients at interest rates of between 7 and 9 percent for periods of 3 to 7 years, making it the cheapest source of funding for the sector in the country.
Equity- Kenya’s biggest bank in terms of customer base – becomes the first beneficiary of the Chinese $5 billion fund for the development of small and medium enterprises in Africa.
The signing of the agreement was the culmination of three years of negotiation for the long term loan facility to be advanced to small and medium enterprises.
The facility will allow Equity Bank advance long –term development loans to the SME sector in the country at affordable interest rates in a bid to spur the sector which plays a crucial role in the social economic development of the country.
Lack of access to affordable credit is recognized as one of the key challenges facing the development of the SME sector in Kenya.
“We are proud as a bank and as Kenyans to be the first beneficiary of this support by China Development Bank” said in Nairobi, James Mwangi the CEO and MD of Equity Bank.
Mwangi said the SME sector in Kenya faced the challenge of high cost of credit, high bank charges and fees, limiting their potential to contribute to the country’s Gross Domestic Product (GDP) and the attainment of the goals of Vision 2030, Kenya’s economic growth blueprint.
The China Development Bank has been studying Equity Bank with a view of learning the Equity model of banking and its sustainability for rural China.
“This signing signifies South -South cooperation and collaboration to address our common challenges” said the Governor of China Development Bank Jiang Chaoliang.
China Development Bank is the biggest development bank in the world with over $97 billion in assets, larger than all other development banks in the world put together.
For two consecutive years, Equity Bank has been named the Micro Finance Bank of the Year in Africa for assisting local communities and aspiring entrepreneurs to raise finance, ultimately contributing to their growth and development
Source African Press Agency
African News from NetNewsPublisher.com
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