Home » Kenyan businessman James Mwangi’s Equity targets traders with $2.1-billion fund

Kenyan businessman James Mwangi’s Equity targets traders with $2.1-billion fund

by Mfonobong Nsehe
James Mwangi

Equity Group Holdings, East Africa’s largest financial services conglomerate led by Kenyan banking magnate James Mwangi, is preparing to grant creditworthy small traders under the government-backed Hustlers Fund a revolving financing worth Ksh250 billion ($2.1 billion).

The Hustlers Fund, which Kenya’s newly elected President William Ruto will unveil in December as the centerpiece of his job creation agenda, will provide state-backed loans to small enterprises that have failed to secure finance from mainstream banks.

As part of its move to drive growth in the region and support the government’s initiative, Equity Group stated that micro and small-sized firms that repay at least two loans on time under the Ksh50-billion ($410 million) government’s financial inclusion fund will be eligible for up to three times additional credit under its $2.1-billion fund.

“The Hustlers Fund has won our hearts because of its design around financial discipline,” Mwangi, Equity’s Group CEO, said. “It is a loan that you have to have credentials in terms of credit rating to access, it forces you to have saving culture… and it reaches the masses.”

“The risk is being taken by the government,” he noted, adding that Equity Group will assist it by scaling, as people will graduate from the Hustlers fund to the private sector Hustlers fund.

Loans under the Fund, which aims to derisk lending at the bottom of the credit market pyramid, will be capped at Ksh50,000 ($410) and priced at an annual interest rate of eight percent under the Equity’s Africa Recovery and Resilience Plan, which aims to support 5 million MSMEs.

The latest announcement comes just 24 hours after Equity Group reported a 28-percent increase in profit from Ksh26.9 billion ($220.1 million) at the end of the first nine months of 2022 to Ksh34.4 billion ($281.5 million) in the same period of 2022, as the group continues to benefit from efficiency gains due to its business transformation strategies.

As a result of the outstanding financial performance, the group’s assets climbed by 15 percent to Ksh1.36 trillion ($11.1 billion), driven by a 15 percent increase in client deposits, which surpassed Ksh1 trillion for the first time in the group’s history.

Equity Group Holdings Limited is a leading financial services conglomerate located in Nairobi, Kenya’s capital and largest city. It operates through subsidiaries in Uganda, Tanzania, South Sudan, Rwanda, and the Democratic Republic of the Congo, in addition to its Kenyan operations.

Mwangi, who has been instrumental in the growth and transformation of Kenya’s financial services industry, owns a sizable 3.38-percent stake in Equity Group.

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