Equity Bank has entered into a strategic partnership with French financial institution Bpifrance to bolster trade financing for small and medium-sized enterprises (SMEs) across East Africa. The initiative seeks to address the pressing financial needs of SMEs, a sector often described as the backbone of economic growth in the region.
The agreement, formalized in Nairobi, aims to facilitate access to affordable credit, fostering regional trade and supporting the broader East African economy. This collaboration is expected to empower businesses by providing trade finance solutions that enable them to expand their operations, navigate economic challenges, and stimulate job creation.
Through this partnership, Equity will de-risk investments for French companies venturing into Africa, providing syndicated loans in both local and foreign currencies. Dr. Mwangi expressed optimism that Equity’s growing presence in French-speaking regions, such as the Democratic Republic of Congo (DRC) and parts of the diaspora, will strengthen ties with French businesses and attract European investments.
Dr. James Mwangi, Group Managing Director and CEO of Equity Bank, emphasized the importance of SMEs in driving economic progress. “This agreement creates a bridge between Equity Bank and France to facilitate trade between Europe and Africa, empowering SMEs to expand and transition into large enterprises and corporates. There is a component of doing trade finance together, opening lines of credit, and crafting guarantees together as a joint initiative to facilitate customers to grow their businesses,” said Dr. Mwangi.
Emphasizing the strategic role of Nairobi as a financial hub for East and Central Africa in enhancing Kenya’s influence in regional economic integration.The collaboration will focus on offering Credit Facilities, guaranteeing trade transactions, and promoting the development of regional value chains.
BpiFrance CEO, Nicolas Dufourcq, describing Africa as “the continent of the future”, underscored France’s position as a key investor in Kenya, particularly in sectors such as agriculture, fintech and renewable energy. He lauded the agreement as a gateway for fostering trade, technology transfer, and local entrepreneurship.
“We have various partners in West and North Africa and have now signed an agreement with Equity, whom we are going to partner with in co-financing the business community in East Africa. We aim to act as a Franco-African trade bridge, facilitating the flow of capital, technology and entrepreneurship between Europe and Africa,” said Dufourcq.
Despite their critical role in economic development, SMEs in East Africa often face challenges accessing credit due to stringent collateral requirements and high-interest rates. This partnership seeks to bridge these gaps by offering flexible financing solutions and fostering a supportive environment for business growth.
The partnership was signed and unveiled during French Week 2024, jointly organized by the French Chamber of Commerce and the French Embassy in Kenya, which culminated in the business networking event, ‘Inspire and Connect East Africa’. The partnership will provide SME investors with financing options in both US dollars and Kenya shillings, enabling them to scale their operations across the six countries where Equity operates.
This collaboration aligns with Kenya’s recently enacted Economic Partnership Agreement (EPA) with the European Union, granting Kenyan exporters duty-free access to 27 EU member states, including France, Germany and Italy.
As East Africa positions itself as a hub for regional trade, Equity Bank and Bpifrance’s SMEs Financing in East Africa could serve as a model for similar partnerships aimed at fostering economic growth. By prioritizing SMEs, the collaboration has the potential to catalyze innovation, create jobs, and enhance competitiveness across industries.
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