Speaking to media in Nairobi earlier today senior representatives of the European Investment Bank, confirmed lending to support investment by companies across East Africa totalling EUR 92 million (KES 10 billion) in 2016. The European Investment Bank is Europe’s long-term lending institution, owned directly by the 28 European Union member states and the world’s largest international public bank.

Catherine Collin, Regional Representative of the European Investment Bank in East Africa and Robert Schofield, responsible for European Investment Bank lending for small and medium sized companies throughout East Africa and elsewhere on the continent, highlighted the crucial role of entrepreneurs to create jobs, improve lives and ensure sustainable long-term economic growth. They confirmed that 49% of EIB backed lending in Africa last year supported private sector investment by small and medium sized businesses.

They emphasised the EIB’s close cooperation with banks across the region, business associations, regulators and government departments to ensure the maximum impact and benefit to the real economy via the EIB’s credit lines.

During 2016 the European Investment Bank signed new lending programmes totalling EUR 92 million with partner banks and financial institutions across East Africa.

This included:

  • EUR 20 million agreed with HFC to support investment by medium sized companies in Kenya.
  • A total of EUR 29 million signed with KCB for lending across East Africa in Rwanda, Tanzania and Uganda.
  • A EUR 15 million credit line agreed with EXIM Tanzania
  • A EUR 28 million lending programme agreed with Bank of Kigali in Rwanda that will support investment by 46 local firms.

Expected new lending totalling EUR 250 million (KES 27 billion) in partnership with banks across East Africa was also announced. The expected launch later this year of the first sector specific credit lines to be supported in the region was also confirmed. These 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. This lending has been complemented by a detailed technical assistance programme, supported by the European Union, that has contributed to successful implementation and ensuring maximise benefits from the overall programme. Technical assistance includes strengthening skills such as environmental, social and money-laundering assessment by regional banks and improving assessment of the economic impact of projects financed through the scheme.

Following the success of the first Private Enterprise Financing Facility programme this was extended through a second scheme launched less than 18 months ago. Reflecting strong demand and effective lending by local financial partners the EIB expects to launch a third Private Enterprise Financing Facility, to enable credit lines totalling EUR 250 million, later this year.

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.

Last year the European Investment Bank provided more than EUR 26.5 billion to support investment by small and medium sized companies around the world. The EIB’s experience gained working with local banking partners in East Africa has guided more recent lending elsewhere in Africa. Working in partnership with local banks and financial institutions EIB backed lending reflects local business investment needs and existing knowledge of local clients.

Prior to agreeing a new lending programme the EIB carries 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 supported transformational investment 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.