AfDB Approves $60m Facility to Boost Trade Finance Access for Kenyan Businesses

Trade finance shortages remain a significant barrier for African businesses, particularly SMEs that struggle to access affordable credit and risk-mitigation instruments.

The Board of Directors of the African Development Bank Group has approved a US$60 million Trade Finance Transaction Guarantee facility designed to expand access to trade finance for small- and medium-sized enterprises (SMEs) and local corporates in Kenya through Equity Bank (Kenya) Limited.

The new facility will enable Equity Bank to issue guarantees of up to 100 percent to international confirming banks, covering non-payment risks linked to the confirmation of Letters of Credit and other trade finance instruments. This support will help Kenyan importers secure essential goods and services while strengthening confidence among global trading partners.

Strengthening Kenya’s Trade Ecosystem

Trade finance shortages remain a significant barrier for African businesses, particularly SMEs that struggle to access affordable credit and risk-mitigation instruments. The AfDB guarantee facility is expected to ease these constraints by:

• Increasing the availability of import-linked trade finance

• Expanding credit to SMEs and mid-sized firms

• Supporting stronger value chains and industrial competitiveness

• Enhancing financial sector stability through risk-sharing

• Strengthening Kenya’s role in regional and continental supply chains

The facility will also help spur intra-African trade, a central objective of the African Continental Free Trade Area (AfCFTA), by allowing more businesses to participate in cross-border commerce.

AfDB: Trade Finance Is Key to Africa’s Development

“Supporting trade in Africa is a key priority at the African Development Bank,” said Lamin Drammeh, AfDB Trade Finance Division Manager. He emphasized that trade finance is essential for economic development, enabling businesses to move goods, expand operations, and integrate into global markets.

“We are delighted to work with Equity Bank, a strong partner with deep knowledge and a wide network in Kenya, on the shared ambition of strengthening regional trade,” Drammeh added.

Equity Bank: A Lifeline for SMEs Facing Tough Conditions

For Equity Bank, the guarantee comes at a crucial time. Kenyan SMEs have faced persistent challenges accessing credit due to high collateral requirements, perceived risk, and global economic uncertainty.

“The African Development Bank’s support strengthens Equity Bank’s capacity to unlock growth opportunities for local enterprises by enhancing their ability to trade with confidence, manage risk, and sustain their operations,” said Moses Nyabanda, Managing Director of Equity Bank (Kenya) Limited.

He added that the facility will allow Equity Bank to expand access to essential trade finance instruments, enabling importers to conduct transactions smoothly and securely.

A Boost for Regional Integration and Economic Growth

By sharing financial risks with confirming banks and empowering Kenyan businesses to engage more actively in global and regional trade, the facility supports broader development goals, including:

• Job creation and SME growth

• Increased import and export activity

• Strengthening Kenya’s manufacturing and industrial base

• Supporting AfCFTA implementation

• Driving economic transformation and resilience

The AfDB–Equity Bank partnership underscores how targeted trade finance support can help bridge Africa’s financing gaps, stimulate private-sector growth and foster deeper regional integration.