Groups Earmark $74m for SME Financing in Africa

March 3, 2018
Groups Earmark $74m for SME Financing in Africa

By Modupe Gbadeyanka

The African Guarantee Fund for Small and Medium-Sized Enterprises (AGF) has entered into a re-guarantee transaction of an amount of up to $74 million with GuarantCo, to increase its guarantee capacity for SME financing.

SMEs have a large and growing impact on GDP in emerging markets and are a key source of job creation.

Strengthening Africa’s infrastructure is critical for development as it is through this that African countries become more competitive at a global level.

With this increased capacity, AGF will be able to support larger local currency transactions for SMEs involved in infrastructure.

Over the past 6 years, AGF has led the guarantee market in Africa by issuing financial guarantees to a tune of $690 million. This has enabled its partner financial institutions to issue loans estimated at $729 million to about 7600 African SMEs.

GuarantCo is part of the Private Infrastructure Development Group, (PIDG), and is a global guarantee fund that has issued over $900 million of guarantees since inception in 2005 with a mandate to enable local currency finance for infrastructure.

While commenting on the GuarantCo AGF partnership, Felix BIKPO, AGF’s Chief Executive Officer stated, “AGF is glad to be joined by GuarantCo in bridging the infrastructure financing gap. This partnership aims to put in place an even stronger collaboration that will work on the entire value chain of infrastructure projects in Africa. We are looking forward to supporting other SMEs that work with key players in the infrastructure sector.”

Lasitha PERERA, GuarantCo’s Chief Executive Officer said “We are delighted to be able to partner with the African Guarantee Fund and increase support to SMEs active in the infrastructure sector in Africa.

“This collaboration between two local currency focussed guarantors offers the potential for us to engage local financial institutions and investors in financing the entire value chain in an African infrastructure project.”

The transaction will enable AGF and GuarantCo to explore further partnership opportunities of working together in contributing towards economic growth in Africa.

Modupe Gbadeyanka

Modupe Gbadeyanka is a fast-rising journalist with Business Post Nigeria. Her passion for journalism is amazing. She is willing to learn more with a view to becoming one of the best pen-pushers in Nigeria. Her role models are the duo of CNN's Richard Quest and Christiane Amanpour.

Leave a Reply

Groupe PSA 15.4% Rise in Sales Drives Revenue up 20.7%
Previous Story

Groupe PSA 15.4% Rise in Sales Drives Revenue up 20.7%

FINCA Pioneers Digital Financial Inclusion Drive in Tanzania
Next Story

FINCA Pioneers Digital Financial Inclusion Drive in Tanzania

Latest from Economy

Don't Miss