MICROCAPITAL BRIEF: Equity Group Nets Over $165m from IFC, BII, FMO, ResponsAbility, Symbiotics for Climate Projects, Financial Inclusion for MSMEs in Africa

Partially through its Financial Institutions Growth Fund, the International Finance Corporation (IFC), a member of the World Bank Group, is paying an undisclosed sum to acquire a 6.7-percent stake in Equity Group Holdings, which has banking operations in Democratic Republic of Congo, Kenya, Rwanda, South Sudan, Tanzania and Uganda. IFC and the UK government’s British International Investment (BII) also are each lending the group’s Equity Bank Kenya USD 50 million. As part of the package, the Dutch development bank Financierings-Maatschappij voor Ontwikkelingslanden (FMO) and two Switzerland-based investors, ResponsAbility Investments and Symbiotics, are lending Equity Bank Kenya a total of USD 65 million in undisclosed portions. The goals of the investments include “increasing access to financial services for small businesses and funding for green projects.” Equity Group plans to use the new funds for its Africa Recovery and Resilience Plan, through which it plans to invest USD 6 billion in 25 million households and 5 million micro-, small and medium-sized enterprises (MSMEs) to create 50 million jobs. Its climate-aware commitments include not to invest in coal and to direct USD 80 million via its subsidiaries to projects that it deems green.

Founded in 1984, Equity Group is based in Kenya and has operations in five other countries plus a representative office in Ethiopia. Its shares are listed on stock exchanges in three countries, and its subsidiaries span the insurance, telecommunications, financial technology (fintech) and investment banking sectors. As of 2022, it serves 15 million customers with assets valued at USD 11.2 billion.

Founded in 1956, IFC offers loans, equity investments, advisory services and technical assistance to private companies with the intent of alleviating poverty and promoting open and competitive markets in developing countries. During the 12 months ending June 2021, the organization disbursed investments totaling USD 31 billion, of which about one third was mobilized from partner institutions.

Established in 1948, BII, formerly known as Commonwealth Development Corporation (CDC) Group, issues debt, equity and “fund-of-funds” investments with the aim of fostering growth in “sustainable” businesses to raise living standards in Africa and South Asia. During 2020, CDC reported issuing new commitments worth GBP 1.8 billion (USD 2.5 billion), ending the year with an investment portfolio of USD 6.2 billion.

By Hasnat Aslam, Research Associate

Sources and Additional Resources

IFC press release
https://pressroom.ifc.org/all/pages/PressDetail.aspx?ID=26966

BII press release
https://www.bii.co.uk/en/news-insight/news/were-partnering-with-equity-group-and-ifc-to-support-small-business-lending-and-climate-smart-projects-in-africa/

Equity Group Holding homepage
https://equitygroupholdings.com/

FMO homepage
https://www.fmo.nl/

ResponsAbility homepage
https://www.responsability.com/

Symbiotics homepage
https://symbioticsgroup.com/

BII homepage
https://www.bii.co.uk/

IFC Financial Institution Growth Fund profile
https://www.ifcamc.org/funds/ifc-financial-institutions-growth-fund

IFC homepage
https://www.ifc.org

Previous MicroCapital story on IFC
https://www.microcapital.org/microcapital-brief-microfinance-lender-kixicredito-to-boost-e-services-in-angola-with-support-from-ifc/