Equity Bank CEO James Mwangi signed an agreement along with Thomas Duve, the KFW German Development Bank regional director, South Africa and Nigeria, on January 11, 2012, at the Equity Centre, Nairobi. The agreement will promote the growth of the export-oriented small-scale businesses in Kenya.
Small and medium enterprises will now have access to cheaper loans, following a Ksh 2 billion deal between Equity Bank and the German Development Bank. The loan will be in dollars and will be granted at 5-12 percent interest rates, depending on a firm’s credit worthiness. Borrowers will have a big reprieve from the 25 percent lending rate in the market.
Equity Bank CEO reiterated that the loan will enhance Equity Bank’s funding activities to small-scale export businesses in Kenya and East African countries. James Mwangi also added that the customers borrowing at the current rates had dropped markedly and that the bank needed to diversify its portfolio. The bank will also tap into the advisory services relating to the business finance segment starting this quarter.
This deal will solve the finance and banking problems and boost the capacity of SMEs that form the backbone of the economy.