AGF and UBA Group Partner to Support SMEs through a Portfolio Guarantee of USD 50 million

African Guarantee Fund and United Bank for Africa (UBA) signed a partnership that ensures UBA provides USD 100 million in new loans to small and medium enterprises (SME) business space across the 20 African countries where Africa’s global bank UBA has presence in Africa.

The AGF under this agreement will support UBA’s SME business through a USD 50 million Master Portfolio Guarantee, as well as facilitate extensive capacity development for the Bank’s teeming SME customers.

Speaking at the signing ceremony, the Group CEO of African Guarantee Fund, Jules Ngankam, said the partnership between two pan-African institutions who are both at the forefront of catalysing growth and development of SMEs will significantly drive economic growth across the continent.

“Small and medium enterprises despite being the backbone of all African economies – they account for 90% of the private sector and 60% of all jobs – are perceived as risky and therefore have limited access to financing. Through this guarantee facility and the capacity development grant support, we will de-risk SMEs with a priority on those that are owned or led by women and those that are within the green sector.

UBA’s Group Managing Director, Oliver Alawuba, who signed the agreement on behalf of the Bank, said that UBA remains committed towards supporting SMEs in Africa, especially given its robust network, which is spread across the 20 countries in Africa and major global financial capitals.

“We will activate the bank’s value-added propositions to Women-owned SME Businesses across Africa through the AFAWA (Affirmative Finance Action for Women in Africa) program which includes availing loans to women at more concessional rates with more customer friendly collateral terms to further bridge the $42 billion financing gap facing women in Africa,” Alawuba said.

In same vein, capacity development platforms are to be extended for free or at highly discounted rates while the partners will engage with governments across Africa to create and activate business environments that are more women friendly. It will also expand the Bank’s Green Finance propositions across Africa.

This partnership is sequel to the announcement made by United Bank for Africa (UBA) Plc, and Africa Continental Free Trade Area (AfCFTA) Secretariat in September 2024 which will help the Bank drive its $6Bn commitment to SMEs across Africa under the AfCFTA initiative.