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The African Development Bank (AfDB) has approved a $150 million subordinated loan to Equity Bank Kenya Limited to strengthen the bank’s capital base and expand lending to small and medium-sized enterprises (SMEs) across Kenya.
The eight-year facility includes a five-year grace period and forms part of Equity Bank Kenya’s wider $500 million capital-raising initiative.
“Small businesses are the backbone of Kenya’s economy, yet too many entrepreneurs lack the financing needed to turn their ambitions into thriving enterprises. This investment will help unlock opportunities for businesses to grow, create jobs and improve livelihoods. Our priority is to ensure that women and young entrepreneurs have a fair chance to participate in Kenya’s economic growth,” said Ahmed Attout, Director of Financial Sector Development, African Development Bank.
The African Development Bank Group is a multilateral development finance institution established to drive economic development and social progress across Africa. It provides loans, equity investments and technical assistance to African governments and private sector entities. The Bank’s Ten-Year Strategy runs from 2024 to 2033.
Equity Bank Kenya Limited is one of Kenya’s largest commercial banks by customer base, currently serving approximately 1.9 million SME clients nationwide across urban and rural communities.
The $150 million facility will be used to boost Equity Bank Kenya’s capacity to provide long-term finance to small businesses. By 2030, the facility is expected to support around 9,000 new SME loans, with a strong focus on women-led and youth-run enterprises. Equity Bank Kenya also aims to increase the intra-African share of its trade finance portfolio.
The loan will be complemented by up to $250,000 in technical assistance through the AfDB’s Affirmative Finance Action for Women in Africa (AFAWA) initiative, and up to $900,000 in non-financial support through the Bank’s SME Credit Catalyst Programme.
These will go towards business advisory services, digital financing solutions and financial products tailored to women and young entrepreneurs.
SMEs contribute more than 30% of Kenya’s gross domestic product and employ over 80% of its workforce. The facility targets businesses in agriculture, manufacturing, trade, logistics and green industries.
