Equity Group and IFC Extend Partnership to Support Micro SMEs and Climate-Smart Projects

Equity Group and the International Finance Corporation (IFC) have signed a partnership agreement in support of the sustainable development of Africa through supporting Micro Small and Medium-sized businesses (MSMEs) from all sectors of the economy including climate-smart businesses.

The partnership has seen IFC and its partners including the Dutch Development Bank (FMO), British International Investment (BII) and Symbiotics, ResponsAbIility from Switzerland commit USD 165 million (approx. Ksh.19 billion) towards Equity’s ‘Africa Recovery and Resilience Plan’ that will see the Group, through its regional banking subsidiaries, finance at least 5 million MSMEs and 25 million households, therefore, creating 50 million direct and indirect jobs.

The credit facility of USD 165 million includes USD 50 million from IFC, USD 50 million from British International Investment (BII) and USD 65 million from Symbiotic, Responsibility and FMO, the Dutch entrepreneurial development bank and a long-time shareholder in Equity through Arise Investments.

Further to the agreement signing, IFC and the IFC Financial Institutions Growth Fund acquired a 6.71 percent stake in Equity Group, East Africa’s largest banking group. The investment is IFC’s first in Africa that aligns with the corporation’s approach to increasing green equity investments in financial institutions.

Through this equity investment, Equity Group commits to zero lending for coal-related projects such as the development or expansion of coal-fired power plants, coal mines, transportation assets used exclusively for coal, or infrastructure assets exclusively dedicated to supporting coal mines and coal transportation, or any utility company that generates more than 20 percent of energy or revenues from coal, or have an annual coal production of 10 million tons or more; or have an installed coal-fired capacity of 5,000MW or more.

Further, Equity Group has agreed to allocate USD 80 million equity towards climate-related interventions covering all subsidiaries over the next 5 years. Speaking during the partnership signing ceremony, Equity Group Managing Director and CEO Dr. James Mwangi said, “As Equity Group, we are delighted to welcome IFC, a member of the World Bank Group to the Equity family as our second-largest shareholder.

With IFC’s reach as the largest global development institution focused on the private sector equity, we will be able to further advance economic development by empowering and catalyzing the transformation of the lives and livelihoods of the African people and will enhance the success and sustainability of Equity’s ‘Africa Recovery and Resilience Plan’.