The International Finance Corporation (IFC) and Equity group on Tuesday announced they are expanding their partnership to support the sustainable development of Africa by increasing access to financial services for small businesses and funding for green projects in six countries across Eastern and Central Africa.
During the partnership agreement, IFC acquired a 6.71 per cent stake in Equity Group, becoming the lender’s second-largest shareholder after Arise BV of Norway and Netherlands.
“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,” Equity Group Managing Director James Mwangi said.
The partnership plan `Africa Recovery and Resilience Plan’ will see 19 billion shillings edged towards Equity’s program that seeks to finance at least 5 million MSMEs and 25 million households, therefore, creating 50 million direct and indirect jobs in Kenya, DRC, Uganda, Rwanda, Tanzania, and South Sudan.
The plan, which is estimated to cost the insurer 700 billion shillings ($6 million), has gained $1.5 billion in external funding. The credit facility includes $50 million from IFC, $ 50 million from British International Investment (BII) and $ 65 million from Symbiotic, Responsibility and FMO.
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“Supporting small businesses and climate-friendly projects is central to IFC’s strategy in Africa to help create jobs, respond to climate change and leverage the opportunities afforded by the digital economy. IFC’s deepening partnership with Equity Group reflects that strategy and will support economic growth in Africa as the continent recovers from the effects of the COVID-19 pandemic,” IFC’s Vice President of Risk and Finance Mohamed Gouled said.
This is the second facility which IFC has entered into with Equity Group Holdings in the past year, with the first being a $50 million loan to Equity BCDC (Equity’s subsidiary in the DRC) in Congolese francs that is helping the bank to provide additional local currency loans to underserved micro, small and medium-sized businesses in the DRC.
IFC—a member of the World Bank Group—is the largest global development institution focused on the private sector in emerging markets. The organization work in more than 100 countries, using its capital, expertise, and influence to create needs and opportunities in developing countries.
In the fiscal year 2021, IFC committed a record $31.5 billion to private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity as economies grapple with the impacts of the COVID-19 pandemic.