Project ID: 1264

CDB provides 4.3 billion Ksh loan to Equity Bank Kenya Limited for on-lending to SMEs

Commitment amount

$ 65767967.66

Constant 2017 USD

Summary

Funding agency [Type]

China Development Bank (CDB) [State-owned Policy Bank]

Recipient

Kenya

Sector

Business and other services (Code: 250)

Flow type

Loan

Concessional

No

Category

Intent

Development (The next section lists the possible statuses.)

Commercial

Development

Representational

Mixed

Financial Flow Classification

OOF-like (The next section lists the possible statuses.)

Official Development Assistance

Other Official Flows

Vague (Official Finance)

Flows categorized based on OECD-DAC guidelines

Project lifecycle

Status

Completion (The next section lists the possible statuses.)

Pledge

Commitment

Implementation

Completion

Suspended

Cancelled

Milestones

Commitment year

2010

Description

On May 16, 2010, China Development Bank (CDB) signed a 4,308,000,000 Kenya Shilling loan agreement with Equity Bank Kenya Limited — a financial services provider headquartered in Nairobi, Kenya — to support the development of small and medium-sized enterprises (SMEs). The loan had an interest rate of 6-month LIBOR (0.659% in May 2010) plus a 2.2% (see Annual Report and Financial Statements 2012). Multiple maturity dates were given in Equity Bank Kenya annual reports; however, the loan ultimately matured on September 20, 2016. The loan is secured by the Equity Bank Kenya Limited directors’ guarantee.In 2010, Equity Bank Kenya had drawn down Ksh 121 million. In 2011, Ksh 2.91 billion was drawn down. Annual reports from the Equity Bank of Kenya indicate that this credit line was fully drawn down by 2012 and was fully repaid by 2016. The proceeds of the loan from CDB will be used by Kenya Equity Bank to on-lend to SMEs -- especially agro-processing SME exporters -- at interest rates of between 7% and 9% and maturities of 3-7 years. The CDB loan has supported the Mataara Tea Factory Expansion Project, the Kapkoros Tea Factory Project, the Jetlink Logistics Project, and others. In 2012, CDB provided a separate medium term loan of Ksh 4.93 billion to Equity Bank Kenya with interest of LIBOR 6M +2.6% margin and maturity on September 20, 2017 (see Project ID#69475).

Additional details

This project is part of an Africa-wide $1.454 billion loan effort by the China Development Bank to support the development of SMEs.

Number of official sources

13

Number of unofficial sources

8

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Details

Cofinanced

No

Receiving agencies [Type]

Kenya Equity Bank [Private Sector]

Accountable agencies [Type]

Loan type

Non-Concessional

Maturity

6 years

Interest rate

2.859%

Grant element

16.73652639%

Gurarantee provided

Yes

Insurance provided

No