Equity seeks to grow loan book with increased lending to agriculture
A number of banks, among them Equity, have recently increased lending to agriculture, driven by increase in incomes, value addition and commercialisation.
What you need to know:
- During 2022, Equity, using the Shared Prosperity Business Model, extended Shs70.3b worth of credit to 55,726 farmers and related activities
Equity Bank extended Shs70.3b worth of credit to 55,726 farmers and related activities during 2022 in a two-way approach that will expand the bank’s portfolio in agricultural lending while supporting farmers to mitigate the impact of slowed growth.
In details contained in the bank’s financial results for the period ended December 2022, Equity, using the Shared Prosperity Business Model, said it had now structured its lending to factor in the mix of social and economic returns, with focus on key sectors such as agriculture, manufacturing, trade, energy and environment, education, health and oil and gas.
Lending to agriculture remains a challenge to a number of financial institutions due to fear of associated risks.
However, a number of banks have recently increased lending to the sector, driven by increase in incomes, value addition and commercialisation.
Mr Antony Kituuka, the Equity Bank managing director, said while presenting the results that the Shared Prosperity Business Model, will, among others provide a foundations on which the bank will deliver on its strategic priorities and financial undertakings.
Equity has in the last five years posted strong growth, supported by growth in its digital banking platforms, from which at least 94 percent of its transactions worth Shs13b are conducted.
During the period, Equity reported a Shs86.46b growth in total revenue, which rose from Shs382.69b in 2021 to Shs469.16b, due to an increase in revenue earned from cash held in savings, deposit fees and other investments.
Interest on deposits and placements grew to Sh968m, while interest on loans and advances rose to Shs280.44b.
Other incomes included interest on marketable securities, which rose to Shs73.68m, foreign exchange income (Shs45.68m), fees and commission and other incomes, which rose to Shs56.85m and Shs13.53m, respectively.
Mr Kituuka said the performance demonstrated resilience in the face of economic contraction and associated challenges even as profits for the period declined to Shs45.7b from Shs86b.
Total expenditure increased to Shs412.71b from Shs264.48b while written off debt and provisioning for bad and doubtful debt rose to Shs90.68b and Shs34.79b, respectively.
