By JAMES ANYANZWA
The European Investment Bank has unveiled a Sh11.3 billion (Euros 101.5 million) kitty for Small and Medium Sized businesses (SMEs) within East Africa.
The funds are aimed at financing SMEs expansion and modernisation. The funds have been channeled through three banks in the region for onward lending to the Microfinance Institutions (MFIs) and SMEs.
The banks include Kenya’s Chase Bank, East Africa Development Bank (EADB) and National Microfinance Bank (NMB) of Tanzania.
The three banks will use the EIB’s funding to finance investments by the SMEs in the region.
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EIB Vice-president Pim Van Ballekom said the funding would enable entrepreneurs and established firms to engage investment in new markets and create new jobs. “
“Access by small and medium sized business to long term finance is essential for creating new jobs and economic growth and today marks a new era of EIB engagement to support private sector investment by SMEs across East Africa,” said Van Ballekom. Van Ballekom was speaking at the signing of the financial contracts in Nairobi yesterday.
Under the deal, local SMEs will be able to access low cost loans in both local and foreign (US Dollar and Euros) denominations.
This will be under an initiative backed by Euros 6.5 million (Sh728 million) from the European Investment Bank.
Companies across the EAC (Kenya, Tanzania, Uganda and Rwanda) will benefit from Euros 25 million (Sh2.8 billion) while a total of Euros 70 million (Sh7.8 billion) would be made available to the SMEs and MFIs across Tanzania through the National Microfinance Bank.
“Working with a range of well- respected financial partners in the region will increase the geographic scope and sector coverage of this initiative,” he said.