Senior representatives of Europe’s long-term lending institution; European Investment Bank while Speaking to media in Nairobi on Monday last week confirmed lending more than EUR 92 million (KES 10 billion) in 2016 to support investment by companies across East Africa region.
The Bank, which is directly owned by the 28 European Union member states and the world’s largest international public bank said the EUR 92 million was disbursed through partner banks and financial institutions across the region.
According to Catherine Collin, Regional Representative of the European Investment Bank in East Africa, 49% of EIB backed lending in Africa last year supported private sector investment by small and medium sized businesses.
This amount includes EUR 20 million agreed with Housing Finance Kenya to support investment by medium sized companies in Kenya. Another EUR 29 million was signed with KCB for lending in Rwanda, Tanzania and Uganda while EUR 15 million credit line was extended to EXIM Tanzania and EUR 28 million given to Bank of Kigali in Rwanda to support local investment.
The Bank also announced that it will from 2017 extend another EUR 250 million (KES 27 billion) in partnership with banks across East Africa. This second badge will focus support for new agricultural and climate related investment in Kenya and is expected to be used alongside grant support from the European Union.
Since 2010 the European Investment Bank has signed contracts worth a total of EUR 681 million for new credit lines with local banks across East Africa that includes both direct transactions and streamlined lending under a dedicated regional lending programme, the Private Enterprise Financing Facility.
Three additional credit lines, totalling EUR 196m (KES 21bn), for SME lending across East Africa, in Kenya, Tanzania, Uganda and Rwanda, as well as the Democratic Republic of the Congo and Mauritius have already been approved by the Board of the European Investment Bank and are expected to be signed in the coming months.
Prior to agreeing a new lending programme, EIB the officials said that they carry out detailed due diligence to fully understand the local bank’s strategy, approach to risk management and corporate governance, and detailed financial performance. This examines the commitment of partner banks to support private sector growth and analysis of how SMEs can access much needed local or foreign currency. The EIB only disburses money once eligible SME loan proposals are submitted and reviewed.
The European Investment Bank has been operating across Africa for more than 50 years and operated in Kenya since 1976. Over the last decade the EIB has provided more than EUR 22 billion for long-term investment across Africa.
(EIB, editing by Kenyan Wall Street)
