Equity Bank Secures $60 Million AfDB Guarantee to Expand Trade Finance in Kenya
The African Development Bank Group and Equity Bank Kenya Limited have signed a USD 60 million Trade Finance Transaction Guarantee Facility aimed at expanding access to trade finance for small and medium-sized enterprises (SMEs) and local corporates across Kenya.
Under the facility, the African Development Bank Group will provide guarantees of up to 100% to confirming banks against the risk of non-payment on eligible letters of credit and similar trade finance instruments issued by Equity Bank Kenya.
By lowering the risk for confirming banks, the arrangement is expected to free up greater capacity to support transactions originating from Equity Bank, helping Kenyan companies secure financing for eligible imports and compete more effectively in regional and international markets.
The initiative is also designed to strengthen intra-African trade and advance the goals of the African Continental Free Trade Area (AfCFTA).
“Africa does not suffer from a shortage of enterprise. Too often, it suffers from a shortage of financing that allows enterprises to trade,” said Alex Mubiru, the African Development Bank Group’s Director General for East Africa, at a signing ceremony held on October 1 in Nairobi.
“By combining the African Development Bank’s risk-bearing capacity with Equity Bank’s local reach and knowledge, this facility can turn shared risk into expanded opportunity for Kenyan businesses.”
Africa faces a significant trade finance gap. Unmet demand was estimated at as much as $92 billion in 2024, with SMEs among the hardest-hit segment. The African Development Bank Group routinely deploys guarantees and funded facilities to help African financial institutions scale up support for both importers and exporters.
The new partnership between the multilateral lender and one of Kenya’s leading commercial banks is intended to address part of that gap by making trade finance more accessible and affordable for businesses that drive local economic growth and regional integration.
