European Union and European Investment Bank Provide EUR 120 Million for Kenyan SMEs Affected by COVID-19 Crisis

Strategic Insights -

The European Union and the European Investment Bank, operating as Team Europe, have committed EUR 120 million (KES 15.8 billion) in support for Equity Bank to enhance financing for Kenyan companies severely impacted by the COVID-19 crisis. This financing package will provide access to finance at favorable conditions for Kenyan small and medium-sized enterprises (SMEs), particularly in the agriculture sector. The package includes é¼100 million loans from the European Investment Bank to Equity Bank and é¼20 million of European Union grant support. Additionally, new technical assistance, backed by the European Union, will improve Equity Bank's capacity to execute and monitor longer-term agricultural value chains investment projects.

Key Takeaways:

  • The European Union and the European Investment Bank are providing EUR 120 million (KES 15.8 billion) to support Equity Bank in enhancing financing for Kenyan SMEs affected by the COVID-19 crisis.
  • The financing package includes é¼100 million loans from the European Investment Bank to Equity Bank and é¼20 million of European Union grant support.
  • New technical assistance will strengthen Equity Bank's capacity to execute and monitor longer-term agricultural value chains investment projects.
  • Equity Bank is the largest partner for EIB-backed private sector support in Kenya, with the EIB having worked with 17 Kenyan banks and financial institutions over the last 10 years.
  • The European Investment Bank has provided more than é¼1.5 billion in financing to support private and public investment across Kenya since 1976.
  • Kenya's National Treasury observed a downturn in growth rate from 6.1% to 2.5% in 2020, making it the worst year for the country in over a decade.
  • Small and medium-sized enterprises (SMEs), which sustain the highest proportion of employment in the region, are the most vulnerable with limited access to external financing.

Statistics:

  • 51% of Kenya's GDP comes from agriculture (26% directly and 25% indirectly), 60% of employment, and 65% of exports.
  • 17 Kenyan banks and financial institutions have partnered with the EIB over the last 10 years to increase access to finance by entrepreneurs, small holders, and business expansion.
  • The European Investment Bank has provided more than é¼1.5 billion in financing to support private and public investment across Kenya since 1976.
  • Kenya's growth rate dropped from 6.1% to 2.5% in 2020, marking the country's worst year in over a decade.

Sources:

  • "Kenya: European Union and European Investment Bank Provide EUR 120 Million for Kenyan SMEs Affected by COVID-19 Crisis." pivotalsources.com. 2021.