East African businesses to benefit from EUR 101m European Investment Bank support with leading local banks

Investment by companies across East Africa will benefit from three new lending programmes totaling EUR 101.5 million backed by the European Investment Bank formally agreed today. Three local banks Chase Bank, the East African Development Bank and National Microfinance Bank PLC (NMB) will use European Investment Bank funding to finance investment by small and medium sized companies to expand, modernise and start new operations.

The three initiatives were formally agreed in Nairobi earlier today by Pim van Ballekom, European Investment Bank Vice-President responsible for lending in sub-Saharan Africa, Paul Njaga, Chief Finance & Strategy Officer, Chase Bank, Vivienne Yeda, EADB Director General and Mark Wiessing, CEO for NMB Bank.

Kenyan small and medium sized companies will be able to access low-cost loans in Kenyan shillings, US dollars and Euro under an initiative backed by EUR 6.5 million from the European Investment Bank and this landmark agreement marks the first time that Chase Bank has partnered Europe's long-term lending institution.

Companies across the East African Community in Kenya, Tanzania, Uganda and Rwanda will benefit from EUR 25 million provided to the East African Development Bank. The new EIB-backed lending programme is the first joint engagement to improve access to investment loans by small and medium sized companies since successful restructuring of the EADB and represents the start of a new era of cooperation between the European Investment Bank and the East African Community's financial institution.

Through the third agreement with NMB a total of EUR 70 million will be made available for small and medium sized companies (EUR 50 million) and microfinance investment (EUR 20 million) under different criteria. This will be made available to companies across Tanzania through the NMB branch network.

"Access by small and medium sized business to long-term finance is essential for creating new jobs and economic growth and today marks a new era of European Investment Bank engagement to support private sector investment by small and medium sized companies across East Africa. This will enable entrepreneurs and established firms to engage investment in new markets and can be expected to contribute to new jobs. Working with a range of well-respected financial partners in the region will increase the geographic scope and sector coverage of this initiative. We look forward to working with colleagues at Chase Bank, the East African Development Bank and NMB to improve access for low-cost investment finance for companies in East Africa and build on a strong track record of supporting entrepreneurs across the region." said Pim van Ballekom, European Investment Bank Vice President.

"As the leading SME bank we value strategic partnerships with like-minded institutions such as the European Investment Bank that foster the growth of the SME sector within Kenya. The partnership with European Investment Bank will also enable Chase Bank to give long term lending facilities such as asset finance, leasing, working capital finance, over draft facilities amongst others to eligible SMEs, which in turn will give the business owners peace of mind as they pursue their strategic goals." said Paul Njaga, Chief Finance & Strategy Officer, Chase Bank.

East African Development Bank Director General, Ms. Vivienne Yeda, thanked EIB for the timely support, which she noted would go a long way in helping the bank realise its sustainable development objectives among its member states. She called on member states to prioritise the integration of regional noting that the region stood to gain much by opening up its borders, thus enabling our people to move freely, sharing experiences and best practices. "There is no better way of facilitating the private sector to do what they do best than to open up our economies, enabling them to produce efficiently and access markets in a timely fashion," said Ms. Vivienne Yeda.

Mark Wiessing, CEO of National Microfinance Bank said "The EIB facilities will allow us to continue providing longer tenor and affordable loans to more micro enterprises and emerging SME's, which are the engine of economic growth and wealth creation for so many Tanzanians.  It is also a strong sign of confidence of EIB in NMB, the country's largest and most profitable bank in which both the Government of Tanzania and Rabobank of the Netherlands hold large minority stakes, and in Tanzania as a whole."

Today's three agreements follow previous support for small business investment in East Africa and will contribute both to the long-term development of the East African financial sector, and ensure that more funding is available to private enterprises. Growth and investment to explore new opportunities by many companies in the region is currently hindered by challenges getting access to funding. Intermediary banks will ensure that environmental impacts of projects financed under the scheme are identified and mitigated following relevant local and international standards.

The European Investment Bank has been supporting long-term lending to Kenyan SMEs through local intermediary banks since 1991 and is the only international financial institution to provide local currency, long-term financing through local banks in the country.