A leading non-bank financial institution in the continent, African Guarantee Fund (AGF), has received an additional $33 million financing from German lender, KfW Development Bank, in a move that would catapult the fund’s efforts to enable the Small and Medium Enterprises (SMEs) to continue to play their critical role in driving Africa’s economy.
The new financing came at
a time when the continent’s SME sector has been singled out as a key driver of growth. This now placed AGF firmly on the driver’s seat as the champion to ease access to financing for SMEs across Africa.
AGF is focused on its ultimate goal to provide financial guarantees for over 10,000 SMEs annually by partnering financial institutions, and as a trickledown effect to create 30,000 jobs per year.
“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 $1 billion worth of guarantees making available about $1.7 billion for SME financing through our Partner Financial Institutions. This has led to the creation of more than 100,000 additional jobs,” said AGF Group Chief Executive Officer, Felix Bikpo.
Out of 20,000 Africans from various economic sectors that have so far benefited from the AGF guarantees, the fund was very proud that 60 per cent of these SMEs were owned by youths who are the majority in Africa today, and 30 per cent 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 $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 $251 million commitment from G7 countries,” Bikpo added.
AGF is 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.
AGF was 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: the French Development Agency (AFD), the Nordic Development Fund (NDF), the Investment Fund for Developing Countries (IFU) and the KfW Development Bank (KfW).
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