Equity Group has set up n Sh 678 Billion stimulus package to assist East and Central African enterprises and individual borrowers recover from the impact of the Covid-19 outbreak.
The package focuses on food and agribusiness, manufacturing and logistics, commerce, Micro Small, and Medium Enterprises, as well as social impact and environmental initiatives.
The impact of Covid-19 on Kenya’s SME sector continues to be problematic. Most have closed their doors due to a lack of financial assistance, while others are struggling to make ends meet.
According to Equity Group Managing Director, James Mwangi in the next five years, five million MSMEs and 25 million individual borrowers will benefit from a total of Sh 678 billion.
The plan is also aimed to create 50 million jobs, 25 million directly and 25 million indirectly.
According to the Kenya National Bureau of Statistics (KNBS), around 400,000 Micro, Small and Medium Enterprises (MSMEs) have died in the first year of operation in the last five years, raising concerns about the sector’s long-term viability.
Equity’s Eastern and Central Africa recovery and resilience strategy, according to Mwangi, is expected to provide funding of up to 2% of the combined GDP of the six economies in which the Group operates.
“The recovery plan will have a special focus on youth and women, supporting them to be the primary drivers of creating and expanding opportunities in the real economy,”
It is expected to provide a mix of short-term overdrafts, medium-term loans, and credit facilities to businesses that require long-term project and development finance.
Food and agriculture
Following the COVID-19 disruptions, the initiative aims to fund in-country manufacturing and regional supply chains to help the global supply chains affected.
Equity claims it will focus on unlocking productivity improvements and value addition ecosystems in the food and agribusiness sector to ensure regional food security while improving value creation.
The recovery and resilience strategy also aims to develop the region into a manufacturing hub by using productive capacities and comparative advantages.
Trade and Investments
In terms of trade and investments, the Group intends to concentrate on expanding markets for the primary sectors of food and agricultural, as well as manufacturing products, as well as realizing investments to support growth in both areas.
Equity Group’s approach includes credit risk-sharing methods and capacity building through financial literacy and entrepreneurship training to improve the success rate of MSMEs and young people.
In collaboration with the Mastercard Foundation, the Group has piloted lending to young people under the Young Africa Works program. 436,000 MSMEs were trained and funded to the tune of Sh136 billion, resulting in the creation of 1.2 million jobs as the businesses expanded and grew as a result of access to funding.
Equity Group has partnered with the United Nations Resident Coordinators in six countries for a collaborative effort to advocate Africa’s socio-economic change.