AfDB Approves $150M Subordinated Loan to Equity Bank Kenya

NAIROBI — The Board of Directors of the African Development Bank Group (AfDB) has approved a $150 million subordinated loan to Equity Bank Kenya Limited (EBKL).

The eight-year debt facility, which includes a five-year grace period, is designed to strengthen Equity Bank Kenya’s Tier 2 regulatory capital base and expand long-term credit allocation to small and medium-sized enterprises (SMEs). The transaction anchors EBKL's broader $500 million capital-raising campaign aimed at expanding access to affordable, long-term working capital and capital expenditure financing.

Operational Footprint & Capital Structuring

Equity Bank Kenya currently serves approximately 1.9 million SME clients across its nationwide branch and agent banking network:

• Target Capital Allocation: Dedicated to high-impact economic sectors, including agriculture, manufacturing,logistics, trade, and green/climate-resilient businesses.
• Inclusion Targets: By 2030, the facility is projected to fund approximately 9,000 new SME loans, with explicit quotas to increase loan distribution to women-led and youth-run enterprises, alongside expanding EBKL’s intra-African trade finance portfolio.
• Blended Technical Assistance: The investment will be supported by up to $250,000 in advisory grants via AfDB’s Affirmative Finance Action for Women in Africa (AFAWA) initiative, alongside up to $900,000 in non-financial capacity building through the SME Credit Catalyst Program.

Strategic Mandate & Economic Impact

The financing addresses structural SME funding bottlenecks within East Africa's primary commercial hub:

• Macroeconomic Context: SMEs generate over 30% of Kenya’s gross domestic product (GDP) and account for more than 80% of total national employment, yet face persistent structural deficits in accessing long-term debt capital.
• Strategic Alignment: Aligns with AfDB’s Ten-Year Strategy (2024–2033), Cardinal Point 3 of the Bank's strategic vision, and the Kenya Country Strategy Paper (2024–2028) prioritizing private sector development, inclusive growth, and regional trade integration.

Executive Commentary

"Small businesses are the backbone of Kenya’s economy, yet too many entrepreneurs lack the financing needed to turn their ambitions into thriving enterprises. This investment will help unlock opportunities for businesses to grow, create jobs and improve livelihoods. Our priority is to ensure that women and young entrepreneurs have a fair chance to participate in Kenya’s economic growth."
— Ahmed Attout, Director of Financial Sector Development at the African Development Bank

Transaction Advisory

• Lender / DFI: African Development Bank Group (AfDB).
• Borrower: Equity Bank Kenya Limited (Subsidiary of Equity Group Holdings).

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