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The European Investment Bank (EIB) agreed on Friday to provide 110 million euros to support small and medium scale companies across East Africa.

The EIB said the funds would support job creation and economic growth in Kenya, Tanzania, Uganda, and Burundi by providing long-term local and foreign currency loans and support investment across a range of sectors, including agriculture.

The investment programme was formally launched in Nairobi by EIB Vice President Pim van Ballekom, according to a statement published on the EIB website.
 
“Investment by small companies and entrepreneurs is essential for economic growth and to create jobs,” said van Ballekom. “The European Investment Bank is pleased to strengthen our support to ensure that East African companies can unlock new business opportunities and build on previous successful engagement with leading local banks.”

The EIB funds will be disbursed via three dedicated credit lines provided to three banks: African Banking Corporation, NIC Bank, and CRDB Bank.

“We are very happy to be partnering again with EIB and securing from them a second credit line,” said Shamaz Savani, ABC Bank Group Managing Director. “We first received 770 million Kenyan shillings from EIB in 2012, which we have disbursed to our SME clients for longer term and at affordable rates.”

According to the statement, the EIB would provide a credit line worth 5 million euros to ABC Bank to support companies in Kenya and Uganda. The EIB will also provide credit line worth 50 million euros to NIC Bank Kenya for companies in Kenya alone. Companies in Tanzania and Burundi will benefit from a credit line worth 55 million euros provided to CRDB Bank.

“We are delighted to deepen our partnership with EIB in supporting the development of SME and Midcap in various sectors of Tanzanian economy especially agriculture,” said Saugata Bandyopadhyay, Deputy Managing Director Operation & Customer Service at CRDB Bank.

Over the last decade, the EIB has provided over 18 billion euros to finance small businesses across Africa. Last year, the EIB provided over 22 billion euros to support companies across the world.

Chibuike Oguh is Financial Nigeria's Frontier Markets Analyst