African Guarantee Fund for Small and Medium-sized Enterprises (AGF) has signed a Memorandum of Understanding with the Kenya Association of Manufacturers (KAM) to promote the growth and development of the manufacturing sector through provision of capacity development assistance to Small and Medium-sized Enterprises (SMEs).
Through the MoU, the Guarantee Fund and KAM will collaborate to identify and analyze funding gaps, institutional challenges and key impediments in the manufacturing sector and collaborate on implementing solutions to the same.
This is in line with both institutions’ emphasis on manufacturing and value-addition as key ingredients for adding value to producers and consumers and more importantly as an avenue for employment-creation and economic development in Kenya.
The agreement will also be instrumental in promoting blended financing to trigger appetite and demystify concerns for private sector players to join.
This will be achieved through AGF’s guarantee products and capacity development and KAM’s Sustainable Use of Natural Resources & Energy Finance (SUNREF) credit and technical facility.
“The signed partnership sets out two key areas of collaboration. It will on one hand ensure energy efficiency and conservation initiatives and on the other hand involve banks in identifying highly potential micro and small enterprises and recommending them to be supported within the recently launched KAM Manufacturing SME Hub”, said KAM CEO, Ms. Phyllis Wakiaga.
“The SME Hub is geared towards preparing, nurturing and growing businesses to take full advantage of new emerging market frontiers both locally and internationally”, she added.
Speaking during the signing ceremony, AGF CEO, Mr. Felix Bikpo said, “SME financing cannot be enhanced by simply scaling up volumes of financing but by developing innovative delivery models and finding ways of enhancing the SMEs’ capacity, as ultimately, this becomes their collateral for accessing more credit.”
Mr. Bikpo termed the partnership as a pacesetter, hailing it as the first between AGF and a national manufacturing association among the 40 African countries where AGF is currently operational.
The signed MOU is also focused on the attainment of Global SDGs through KAM’s Green Growth Initiative that promotes interventions enhancing the resiliency of the production system to climate change and AGF’s Green Guarantee Facility that provides a special window to Financial Institutions providing access to financing for SMEs in green energy and a variety of climate adaptation initiatives.