Equity Bank Kenya, a Kenya-based bank focused on micro-, small and medium-sized enterprise (MSME), recently signed an agreement with Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden (FMO), a Dutch development bank, whereby FMO’s Nasira Risk Sharing Facility will guarantee USD 50 million in lending by Equity Bank Kenya. This lending is meant to help agricultural MSMEs run by female and young entrepreneurs as they adjust to the COVID-19 pandemic.
The goal of Nasira is to support entrepreneurs in Sub-Saharan Africa who fall into one or more of the following categories: youth, women and migrants. Its guarantees enable local banks to lend to groups of entrepreneurs that otherwise are perceived as too risky. Nasira, which is managed by FMO, was launched in December 2018 by FMO and the EU with an initial volume of EUR 75 million (USD 92 million) and a period of four years.
Equity Bank Kenya, founded in 1984 and based in Nairobi, provides loans, savings and fund transfer services. It is one of six subsidiaries of Kenya-based Equity Bank Group. As of 2020, the subsidiary has 177 offices and total assets valued at USD 546 million. As of December 2019, Equity Bank Group reported USD 6.1 billion in total assets, a gross loan portfolio of USD 3.3 billion and deposits of USD 4.4 billion from operations in the Democratic Republic of Congo, Kenya, Rwanda, South Sudan, Tanzania and Uganda.
Established in 1970, FMO is 51-percent held by the Dutch government and 49-percent by the private sector. The institution works toward the UN’s Sustainable Development Goals by funding capacity development as well as placing debt and equity investments in sectors such as agribusiness, financial institutions and energy. During the six months ending June 2020, FMO lost EUR 280 million (USD 330 million) on a total portfolio of EUR 12.7 billion (USD 14.9 billion).
By Eha Joshi, Research Associate
Sources and Additional Resources
FMO press release
https://www.fmo.nl/news-detail/1944212a-d1de-439d-90be-6cc5c4414f88/equity-bank-kenya-and-nasira-sign-guarantee-program-for-covid-19-support
Nasira homepage
http://www.nasira.info
FMO profile on Nasira
https://www.fmo.nl/nasira
Equity Bank Kenya website
https://equitygroupholdings.com/ke
Equity Group Holdings financials
https://equitygroupholdings.com/investor-relations
Previous MicroCapital article on Equity Bank Kenya
https://www.microcapital.org/microcapital-brief-international-finance-corporation-ifc-loans-100m-to-equity-bank-to-support-smes-renewable-energy-in-kenya
Previous MicroCapital article on FMO
https://www.microcapital.org/microcapital-brief-nasira-guaranteeing-35m-in-digital-lending-by-sasfin-to-smes-owned-by-migrants-women-youth-in-south-africa-from-emergency-covid-19-facility-funded-by-eu-fmo
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