James Mwangi’s Equity Bank partners with African Guarantee Fund to promote female-led MSMEs

A recent $75-million (Kshs 8.25 billion) deal between James Mwangi’s Equity Bank and the African Guarantee Fund (AGF) will provide loans to female-led micro, small and medium-sized (MSMEs) businesses in four African countries.

Due to the pandemic’s severe impact on regional businesses, the fund will bolster the bank’s capacity to lend funds to female-owned businesses in Kenya, Uganda, Rwanda and the Democratic Republic of Congo. It will ensure that women can access credit at affordable interest rates when it is most needed.

SMEs employ the vast majority of Africa’s labor force and play an integral role in its sustainable growth trajectory. To enable them to survive the pandemic, Equity Bank uses easily accessible and affordable loans as a financial tool to de-risk these businesses.

During the signing ceremony, Mwangi said: “With this facility from African Guarantee Fund…we will be strongly positioned to continue to offer our customers particularly women in business access to funding at a time when the COVID-19 pandemic continues to impact negatively on businesses. Women MSMEs are key players in driving livelihoods for the majority of families, communities and growth of the economy.”

Since the pandemic started, the bank actively drove finance access for regional SMEs. While it attempted to cushion the pandemic’s impact on SMEs with the financial tool, it also used it to drive economic activity through SMEs.

The bank plays a significant role in partnering with lenders to make funds available to micro and small businesses in the region. Some included a Ksh 5.5-billion ($50 million) loan facility with the International Finance Corporation in September and a Ksh 11-billion ($100 million) loan facility from PROPARCO in October 2020, Tech-ish reported.

Others include a 125-million-euro ($147.15 million) loan facility signed in March 2021 with the European Investment Bank and a recent Kshs 11-billion ($100 million) loan facility with Team Europe (Germany’s DEG, the Netherlands’ FMO and the UK’s CDC Group).

Equity Bank is headquartered in Nairobi, Kenya, and listed on the Kenyan Stock Exchange. As of 2017, the bank was worth $5.243 billion in assets. It is regarded as Africa’s largest bank with over 14 million customers as of December 2019.

Mwangi currently serves as the group managing director and group CEO of Equity Bank with a net worth of $170 million, as estimated by Business Chief. The multimillionaire and his bank have been caught up in a web of scandals in recent years linked to fraudulent transactions at both the local and the international level.