Equity endorses SME financing forum

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Equity Bank Group CEO Dr.James Mwangi.
Equity Bank Group CEO Dr.James Mwangi.

Equity Bank has become the third lender in the country to join the SME Finance Forum that seeks to promote financial inclusion for Small and Medium Enterprises (SME).

The forum, which is managed by the International Finance Corporation (IFC), is aimed at encouraging financial institutions, tech firms and development firms to endorse financial growth for SMEs. Locally, apart from Equity Bank, only the Commercial Bank of Africa and Co-op Bank have joined the forum. 

 “Our vision is to be the champion of the socio-economic prosperity of the people of Africa. We value integrity, innovation, and respect for our clients. Becoming a part of the SME Finance Forum touches on each of these values as we learn of the latest innovations in SME finance,” Equity Group Executive Director Mary Wamae said in a statement.

The International Finance Corporation has in recent years been keen on promoting financial inclusion for SMEs. So far the company has injected billions of Kenya shillings into local lenders to promote onward lending to SMEs. Earlier this year for example, IFC loaned out a Ksh. 10 billion long term loan to Equity Bank to lend to local small and medium-sized firms. In June, IFC presented Gulf African Bank with its technical advisory services to assist the bank in lending to small and women-owned enterprises. Last year, the global finance corporation loaned out a Ksh. 15.2 billion seven year loan to Co-op Bank for lending to small firms.

Ever since the introduction of the interest rate cap in August 2016, commercial banks have shied away from offering loans to SMEs and individuals who are viewed as being capable of defaulting on the credit advances. The resulting credit crunch has affected SMEs the most since they need credit allocation from banks to establish new businesses or expand their operations. 

ALSO READ: KCB Bank continues financial inclusion for women

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