Equity Bank and AfDB Seal $60 Million Guarantee to Boost Kenyan Trade

The facility provides guarantees covering up to 100% of non-payment risks on letters of credit and similar instruments issued by Equity Bank Kenya. By absorbing this exposure, the African Development Bank enables local institutions to underwrite transactions that might otherwise be rejected due to perceived credit risks. This framework directly tackles the persistent capital shortfall hindering regional and international trade.

Signed in Nairobi on October 1, the agreement leverages Equity Bank’s local market presence alongside the development bank's risk-bearing capacity. Alex Mubiru, the African Development Bank’s Director General for East Africa, noted that the continent possesses ample entrepreneurial energy but lacks the financing tools to sustain it. The initiative arrives as Africa faces a staggering $92 billion trade finance gap, a deficit that disproportionately impacts small businesses. Beyond individual transactions, the project seeks to bolster the African Continental Free Trade Area by ensuring that businesses possess the necessary financial backing to capitalize on regional market integration.