Globally renowned Fitch Ratings Agency has affirmed the African Guarantee Fund’s Insurer Financial Strength (IFS) Rating at ‘AA-‘ (Very Strong), terming it’s outlook – Stable.

In an official statement, Fitch Ratings while recognizing AGF’s strong ownership said, “AGF is backed by public institutions, but it is run on a commercial basis, allowing European countries to support the financing of SMEs in Africa without directly committing their own funds.”

The agency also outlines the strength of AGF’s shareholders stating “It is owned by the development agencies of Denmark (AAA/Stable), Spain (A-/Positive), and France (AA/Stable) and by the African Development Bank (AfDB; AAA/Stable), the Nordic Development Fund (NDF) and the Danish Investment Fund for Developing Countries (IFU).”

Fitch further takes into account reinsurance of AGF guarantees provided by the Swedish International Development Cooperation Agency, United States Agency for International Development, the African Trade Insurance Agency and GuarantCo, and acknowledges this as the reason for AGF’s exceptionally strong net par-to-capital ratio.

Commenting on the affirmed rating, AGF CEO, Felix Bikpo said “This will go a long way in helping us reduce the SME funding gap in Africa that currently estimated at more than USD 150 billion. Lending to SMEs will now be eased as the rating brings a very strong comfort to our partner lending institutions when complying with Basel II & III requirements.”

“We are looking forward to partnering with many more lending institutions across the continent and aiding them to execute their SME financing strategies effectively, thus enabling SMEs to play their expected role in fostering African economic development.” said Mr. Bikpo.

AGF is also recognized as one of the pioneers of green financing. In 2016, AGF in partnership with the Nordic Development Fund, launched a Green Guarantee Facility aimed at unlocking finance for SMEs investing in low carbon, green growth and climate resilient development.

African Guarantee Fund was the first guarantee fund in Africa to be assigned the AA- rating in November 2017.