$33m German bank cash to support 10,000 SMEs

The African Guarantee Fund (AGF) recently said the additional $33 million financing from German lender KfW Development Bank it received will help realise its goal of providing financial guarantees for over 10,000 Small and Medium-sized Enterprises (SMEs) in Africa yearly.

This, it said, would be achieved through partnering financial institutions and as a trickledown effect, create 30, 000 jobs yearly.

According to the Group Chief Executive Officer (CEO), Felix Bikpo, he said that the new capital injection in AGF came when the continent’s SME sector has been singled out as a key driver of growth.

He said it will catapult AGF’s efforts to enable African SMEs continue to play their critical role in driving Africa’s economy.

Bikpo said the new financing now placed AGF firmly on the driver’s seat as the champion that eases access to financing for SMEs across the continent.

He stated further that, “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”.

He said 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 per cent of these SMEs are owned by youth who are the majority in Africa.

Bikpo added that 30 per cent of the SMEs are owned by women, adding that youths and women are  demographics that heavily impact Africa’s economy.

His words: “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 (AfDB) through the recently launched Affirmative Finance Action for Women in Africa (AFAWA) which currently has a $251 million commitment from G7 countries.”

The 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 AfDB.

Other shareholders include: French Development Agency (AFD), Nordic Development Fund (NDF), Investment Fund for Developing Countries (IFU) and KfW.