Equity Group Holdings Plc and The Africa Guarantee Fund (AGF) have signed a 75 million dollars guarantee fund that seeks to support the bank scale up its lending activities to Micro, Small and Medium Sized Enterprises(MSMEs) in Uganda, Kenya, Rwanda and DRC.
The facility will help ensure women from the four countries are able to access credit at affordable interest a time when it’s most needed.
According to the lender, the essence of the fund is to support loan repayments accommodation, prolonging the repayment period of up to 3 years for some of its customers.
Speaking during the signing ceremony, Dr. James Mwangi, Managing Director and CEO of Equity Group Holdings stated that, “With this facility from African Guarantee Fund, whom we share a mission of supporting women MSMEs, we will be strongly positioned to continue to offer our customers particularly women in business access to funding at a time when the COVID-19 pandemic continues to impact negatively on businesses.”
Mwangi said the support in the form of a guarantee fund will mitigate the credit risk Equity is exposed to as the lender continues to work with women MSMEs to navigate through these uncertain times and keep the lights of the economy on.
“Our commitment is to continue working with MSMES to finance them to recover and thrive, and where necessary transform and adapt their businesses to the changing environment and seize new business opportunities.”- Mwangi added.
AGF Group CEO Jules Ngankam said the partnership with Equity Group is of great significance to the economies of Uganda Kenya, Rwanda, and the DRC given their mutual focus on the SME sector which has massive potential to drive economic growth.
“This partnership will also foster sustainable development particularly for women-led/owned businesses who will be supported under our Affirmative Finance Action for Women in Africa initiative and green business who will be supported under our Green Guarantee Facility. Working with Equity Group indeed provides us with a broad opportunity to create impact alongside their various initiatives.”- Ngakam said.
This is the fifth tranche for Equity Group after having signed a $50 million USD (Ksh 5.5 Billion) loan facility with IFC in September; a $100 million USD (Ksh 11.0 Billion) from Proparco in October and a EUR 125 million (Ksh 16.5 Billion) loan facility signed two weeks ago with the European Investment Bank and a US $100 Million (Ksh 11 Billion) Credit Facility with Leading European Development Banks DEG, FMO and CDC-UK to fortify credit flows and liquidity to MSMEs totaling Ksh 52.25 Billion.