Equity is well-placed to meet financial needs of the SMEs

By: JAMES MWANGI

The Global Entrepreneurship Summit (GES), has pointed out the need to create jobs, bolster economies and eliminate barriers for inclusive growth.

With that comes a renewed global focus on small and medium enterprises (SMEs), entrepreneurship and access to capital. As has already been reported in sections of the media, local entrepreneurs will benefit from a Sh53.1 billion Equity Bank loan after multilateral lenders committed to offer the cash at the summit.

US-based Overseas Private Investment Corporation (OPIC) committed Sh20.2 billion ($200 million), the African Development Bank (Sh15.1 billion or $150 million) while International Finance Corporation (IFC) committed Sh10.1 billion ($100 million).

The European Investment Bank set aside Sh7.5 billion ($75 million) to finance Kenyan businesses, bringing the contributions to $525 million (Sh53.1 billion).

Like I had stated previously in other forums, the decision was informed by the bank’s aggressive focus on small and medium-sized enterprises (SMEs), a model that has made Equity Bank the largest lender by customer numbers.

The choice of Equity Bank as the vessel through which these funds will be availed to entrepreneurs is not only an honour, but is a big endorsement of the bank and its operations.

FRIENDLY

It shows confidence about the bank’s governance structure, technological output, branch network, human capital and most importantly, is a vindication of the belief that the bank is the most friendly to entrepreneurs.

Women and the youth make up a big percentage of Kenya’s workforce. Many of the sectors that are critical for economic growth in our country rely heavily on these two groups, yet in emerging markets such as Kenya, enterprises owned by these two groups have traditionally fallen below the pecking order of priorities when it comes to funding.

As a result, most of these businesses, majority of which are SMEs, have unmet financial needs running into billions of shillings every year. This is their biggest barrier to growth and development, the dragon Equity seeks to slay.

The question many may be asking is why Equity?

We boast a platform we can proudly say is one of the best models for delivery of this task in the region, if not in the world. We have been building massive infrastructure to serve SMEs for the past few years.

The bank has already put infrastructure to train up to 1.3 million entrepreneurs in the next few years, through a programme that started in 2010. The training offered gives entrepreneurs the best possible chance of success by providing access to support and funding. To date ‘the beyond financial literacy’ programme has supported over 12,000 entrepreneurs.

Access to credit can open up economic opportunities for SMEs, and bank accounts can be a gateway to the use of additional financial services. But, women and youthful entrepreneurs face significantly greater challenges than men in gaining access to these services.

Equity Bank is seeking to grow the SME sector by making it easy for entrepreneurs to access affordable loans, by removing some of the obstacles that have been making it difficult for smaller businesses launching in the digital age to obtain loans.

These initiatives were tailored for this sector to uplift it because we felt it had been “structurally underserved” by financial institutions.

VAST BRANCH NETWORK

A big percentage of SME accounts are opened in branches, meaning a bank with vast network is important to these ventures. This means there is need to have scale in banking in order to service this sector adequately, which is one of our strongest attributes.

Today, Equity Bank Group has evolved to become a diversified financial services provider offering a full range of personal and corporate banking as well as investment banking, mortgages, custodial services and insurance.

Through a constant focus on exceptional customer experience, relationship banking, capacity building among staff and an effective governance structure, Equity Bank has woven itself to be the leading bank for entrepreneurs in Kenya.

With an asset base of over Sh400 billion, the bank has a regional presence in six countries and a pan-African expansion strategy.

Our ultimate objective is to break the poverty cycle by funding entrepreneurial ideas and opportunities that accelerate job and wealth creation for our youth and women.

Since listing in 2006, the bank’s shareholder value has grown 900 per cent, creating immense wealth for shareholders. Returns have tremendously grown making Equity Bank the most profitable bank in East Africa with a compounded annual growth rate of 78 per cent for the last 10 years, five of which world economies spent fending off the global financial crisis.

All these factors demonstrate the bank’s ability to deliver beyond the dreams of the GES and make Kenya a country of thriving entrepreneurs.