Africa’s leading Guarantee Institution, African Guarantee Fund (AGF) has received an additional Ksh. 3.4 billion (US$ 33 million) financing from German lender KfW Development Bank , in a move that will catapult AGF’s efforts to enable African Small and Medium Enterprises (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.
“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 US$ 1 billion (Ksh. 101.6 billion) worth of guarantees making available about US$ 1.7 billion (Ksh. 172.8 billion) for SME financing through our Partner Financial Institutions. This has led to the creation of more than 100,000 additional jobs,” Felix Bikpo, Group CEO of African Guarantee Fund, said in a statement.
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 US$ 251 million (Ksh. 25.5 billion) commitment from G7 countries.” Mr. Bikpo added.
ALSO READ: KCB injects fresh capital into NBK