The European Investment Bank (EIB), the world’s largest international public bank, has entered into a partnership with Equity bank to assist Kenyan agricultural companies with access to loans with maturities of up to about seven years.
The partnership has resulted in a program referred to as the Kenya agriculture value chain facility, which is worth Sh5.7 billion. The program is expected to help agricultural companies around the country to modernize and harness the full economic, employment and export potential of agriculture as well as expand business with local smallholders.
According to Catherine Collin, European Investment Bank regional representative for East Africa, the program looks to strengthen ties with Kenya.
“The EIB is pleased to strengthen our close cooperation with Kenyan partners and the European Union Delegation to ensure that agricultural investment can increase under an exciting new scheme that acts as a model for our engagement across Africa” she said.
Equity bank was the first bank to partner up with EIB in order to participate in the Kenya Agriculture Value Chain Facility. Onwards, EIB expects more Kenyan banks to join up in the program. According to Polycarp Igathe, Equity Bank managing director, the Kenya National Government’s Big 4 Agenda includes manufacturing and food Security (agribusiness). Equity Bank has aligned its strategy with this national agenda, to focus on growing the agribusiness portfolio through servicing all segments from retail, to SME to large enterprises and corporate banking customers.
This credit facility is expected to be used for on-lending of up to 50% of project costs to beneficiaries who qualify. The whole program primarily targets Value Chain SMEs in agribusinesses that are supporting a smallholder farmer base. This new financing initiative plans on addressing the gap of long-term funding that has stood in the way of growth.
