Equity bank signed yet another loan deal, now with world bank’s lending arm International Finance Corporation (IFC) amounting to Sh 8.3 billion.
The fund aimed at enhancing export-oriented small-scale businesses in Kenya and East Africa, has an extended repayment period that makes it affordable to the target group.
The Bank’s chief Executive, Dr. James Mwangi said the deal will be a seven year facility providing borrowers an ample repayment period.
“The loan repayment period will start from five years to 7 years, than the previous system where borrowers were given up to 3 years,” said Mwangi.
The deal comes at a time when the bank has exhausted all the funds it received including the Sh 2billion it received from German Development Bank earlier in the year.
Mwangi attributed the exhaustion of the funds to the growing appetite of loans by SME’s which accounts for 40 percent of the banks loan book.
Entrepreneurs across East Africa will have access to loan amount of up to 25 percent of the banks total revenue that currently stands at Sh 34 billion at an interest rate of between 10 to 12 percent.
“This is a third of the current interest rates that stands at 32 percent, giving borrowers a big reprieve,” said Mwangi.
The bank has spent approximately USD 200 million lending to SME’s in the last three years.
But IFC Director, Jean Phillipe Prosper,said much focus should be on women entrepreneurs to spur economic growth in the region.
“3.6 percent GDP growth can be achieved by nations if they could focus on women,” said Prosper.
He revealed that USD 3billion has been set for Africa alone to spur development projects. These will see the IFC doubling its number of projects to 300 this year.
Equity got its first spark from IFC in 2002 when the world banks lending arm gave it Sh 120 million (USD1.6million.
Equity has also announced that it will open more branches across the country to enhance financial inclusion especially to the undeserved communities.
“We will be forced to convert a branch in every town for SME’s services,” he added.