The East African Development Bank (EADB) is targeting to increase its lending to small and medium enterprises to spur regional growth and expand employment opportunities.
During the meeting of the Governing Council which brought together finance ministers from majority shareholders, Kenya, Uganda, Tanzania and Rwanda, the bank made the resolution to boost its lending and corporate social investment programs to the private sector to create jobs especially for youth and women.
“We need to work towards supporting the private sector so that they can create more businesses and employ more youth given the high levels of unemployment in the East African region,” said John Mbadi, National Treasury and Economic Planning.
Audited results of the EADB financial results show that in 2023, net loans and advances declined by 9.2pc to Ksh 14.8 billion from Ksh 16.3 a year earlier.
“A number of youth graduate from Universities and Colleges every year, well-educated and trained, only to find no jobs in the market. Currently, Kenya alone has 3.4 million youths unemployed, and every year, we produce 800,000 young Kenyans for the market. It is time we start thinking about how to mainstream and integrate the youth in each action we take, including our budgeting processes,” added Mbadi.
Last year, the bank says availed Ksh 6.5 billion ($50m) to support SME in the region though partner financial institutions over the last five years.
The member states further called for strengthening of the institution in order to help finance key projects which will contribute to regional growth.
“Given the recent events we have learnt a lesson that we need to build our own financial muscle from within so that we can finance our own development programs especially in infrastructure and economic empowerment without relying a lot on external support,” stated Dr. Mwigulu Nchemba, Tanzania Minister of Finance .
This comes after the bank received an “A” rating by S&P Global Ratings in December 2024 with a stable outlook.
S&P further noted EADB’s ability it to reach large share of SMEs where its lending has created more than 60,000 jobs over the past five years as well as helped enable low-cost housing and schools in member states.
The next Governing Council meeting will be held in Kigali, Rwanda next year.
Kenya, Uganda and Tanzania are the single largest shareholders in the bank with 25.01pc shareholding each, followed by Rwanda with 14.83pc. The four countries have a combined shareholding of 89.86pc.
Ronald Owili
