The year 2020 started on a very commendable note for small and medium scale enterprises (SMEs) across Africa as one of the most expansive institution focused on providing financial guarantees for over 10,000 SMEs annually through partner financial institutions received a $33 million boost. Africa’s leading guarantee institution, the African Guarantee Fund (AGF) yesterday announced the receipt of an additional USD 33M financing from German lender KfW Development Bank , in a move that will catapult AGF’s efforts to enable African SMEs continue to play their critical role in driving Africa’s economy.
This new financing comes at a time when the continent’s SME sector has been singled out as a key driver of growth. This now places AGF firmly on the driver’s seat as the champion that eases access to financing for SMEs across the continent. The African Guarantee Fund is focused on its goal to provide financial guarantees for over 10,000 SMEs annually through partner financial institutions and as a trickledown effect, create 30,000 jobs per year.
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“We are excited about the confidence our shareholders and partners have in what we are doing in Africa. This capital injection will go a long way in ensuring that we continue to make a positive impact in the continent. So far, we have cumulatively issued more than USD 1 B worth of guarantees making available about USD 1.7 billion for SME financing through our Partner Financial Institutions. This has led to the creation of more than 100,000 additional jobs,” says Felix Bikpo, Group CEO of African Guarantee Fund.
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Out of the 20,000 African SMEs from various economic sectors that have so far benefited from AGF guarantees, the institution is very proud that 60% of these SMEs are owned by youth who are the majority in Africa today, and 30% owned by women, both being demographics that heavily impact Africa’s economy.
“Our experience traversing Africa has shown us that Women in Africa are tenacious entrepreneurs, even though they face a gender financing gap of USD 42 billion. The capital increase from KfW will largely be used to increase financing of women owned or led businesses. This is in addition to our partnership with the African Development Bank through the recently launched Affirmative Finance Action for Women in Africa (AFAWA) which currently has a USD 251 million commitments from G7 countries.” added Mr. Bikpo.
African Guarantee Fund, a non-bank financial institution whose objective is to promote economic development, increase employment and reduce poverty in Africa by providing financial institutions with guarantee products and capacity development assistance specifically intended to support SMEs in Africa. The institution is founded by the government of Denmark through the Danish International Development Agency (DANIDA), the government of Spain through the Spanish Agency for International Cooperation and Development (AECID) and the African Development Bank (AfDB). Other shareholders include: French Development Agency (AFD), Nordic Development Fund (NDF), and Investment Fund for Developing Countries (IFU) and KfW Development Bank (KfW).
Kelechi Deca
Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry