The Board of Directors of the African Development Bank Group has approved a $150 million subordinated loan to Equity Bank Kenya Limited to strengthen its capital base and expand access to financing for small and medium-sized enterprises (SMEs).
The eight-year facility, approved on 30 October, will boost Equity Bank's capacity to provide long-term finance to small businesses. It will help them expand operations, invest in equipment, create jobs and strengthen local economies. It is expected to benefit entrepreneurs across Kenya, particularly those working in agriculture, manufacturing, trade, logistics and green businesses, with a strong focus on women-led businesses and youth-run enterprises.
"Small businesses are the backbone of Kenya's economy, yet too many entrepreneurs lack the financing needed to turn their ambitions into thriving enterprises," said Ahmed Attout, Director of Financial Sector Development at the African Development Bank. "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."
SMEs contribute more than 30% of Kenya's gross domestic product and employ over 80% of its workforce. Despite their importance, many face significant barriers to accessing finance, particularly longer-term loans needed to grow their businesses.
Equity Bank Kenya already serves approximately 1.9 million SME clients nationwide. The new financing will build on this extensive network to reach businesses across urban and rural communities. By 2030, the operation is expected to support about 9,000 new SME loans and raise its share of loans extended to women-led SMEs and to youth-led SMEs. EBKL also aims to raise the intra-African share of its trade finance portfolio.
The investment will be complemented by up to $250,000 in technical assistance through the Bank's Affirmative Finance Action for Women in Africa (AFAWA) initiative. An additional up to $900,000 in non-financial support is also envisaged through the Bank's SME Credit Catalyst Program.
These interventions will strengthen business advisory services, digital financing solutions and financial products tailored to women and young entrepreneurs. They will also help businesses improve financial management, access markets and build resilience against economic and climate-related shocks.
"By combining long-term financing with practical business support, we are helping entrepreneurs overcome barriers to growth with benefits extending beyond individual businesses to families, communities and the wider economy," Attout added.
The investment is expected to support job creation, higher household incomes, improved productivity, and stronger participation in local and regional value chains. It will also encourage investment in sustainable agriculture, renewable energy, and climate-resilient businesses.
The financing supports Equity Bank Kenya's wider $500 million capital-raising initiative, helping it increase its lending to businesses that struggle to secure affordable, long-term credit. The facility has an eight-year maturity, including a five-year grace period.
"Access to finance can be the difference in whether a business survives or thrives. Investing in small businesses is investing in Kenya's future," Attout said.
The operation aligns with the Bank's Ten-Year Strategy 2024-2033 and Cardinal Point 3 of the Bank's Four Cardinal Points strategic vision, which aims to harness the demographic dividend for economic development. It also supports the Kenya Country Strategy Paper 2024-2028, which prioritises private sector development, financial inclusion and sustainable economic growth.
