Economy

CDB gives Kenya bank $51m loan

(Agencies)
Updated: 2010-05-18 10:11

NAIROBI, Kenya - Kenya's Equity Bank said on Monday it had signed a 4 billion shilling ($50.82 million) financing agreement with China Development Bank for lending to small and medium businesses.

Equity said it was the first beneficiary of a $5 billion Chinese fund for development of small and medium sized businesses in Africa.

"The facility will allow Equity Bank to advance long-term development loans to the ... sector ... at affordable interest rates in a bid to spur the sector which plays a crucial role in the social economic development of the country," Equity said in a statement.

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It said the funds will be available to its customers at interest rates ranging from 7 to 9 percent for between three and seven years.

Officials have been pushing for low lending rates to help pull the east African nation's economy out of sluggish growth following a severe drought last year and fallout from the global financial crisis.

Equity said it had lowered its base lending rate to 12 percent from 15 percent, joining several other large banks, which have slashed their rates in recent weeks.

Although Kenya is the region's largest economy, with more than 40 banks, its commercial lending rates have remained stubbornly high.

Central bank Governor Njuguna Ndung'u has been urging commercial banks for months to lower their lending rates to help spur growth in light of the looser monetary policy.