INTERNATIONAL MICRO, SMALL AND MEDIUM-SIZED ENTERPRISES DAY
African Guarantee Fund for Small and Medium-Sized Enterprises (AGF) is proud to join all global stakeholders in marking this year’s International, Micro, Small and Medium-sized Enterprises Day. Notably, AGF wishes to acknowledge all players who contribute towards supporting African SMEs wherein AGF’s role is very crucial.
African Guarantee Fund’s objective is to help the private sector, mainly the Small and Medium-sized Enterprises (SMEs), to play the role of engine drivers of growth. By closing the greatest obstacle which is the financing gap, AGF enables SMEs to increase sustainable growth and to be a source of employment, skills and wealth creation. In turn, this serves to reduce poverty throughout the continent.
AGF extends risk-sharing guarantees to Partner Financial Institutions (PFIs) which acts as a catalyst to unlock resources to finance SME business activities. This is achieved through provision of its three products – Loan, Fundraising and Equity guarantees to financial institutions for onward lending to SMEs. In addition, AGF provides Capacity Development assistance to both the PFIs & SMEs. This improves the PFIs’ ability to properly assess SME risks whereas for SMEs it builds their capacity for easier access to finance.
Since inception, AGF has issued almost 1 billion USD worth of guarantees which has been leveraged by its Partner Financial Institutions (PFIs) to avail about 2 billion of financing to SMEs. Out of this, USD 1.3 billion has already been disbursed to Small and Medium-sized Enterprises across 40 countries in Africa. This has facilitated more than 20,000 SMEs in various sectors to access finance wherein women entrepreneurs own 30%, while youth own 60% of the supported businesses.
It must be emphasized that this is a category of SMEs who would otherwise be locked out of the financial market due to lack of sufficient collateral required by most financial institutions.
African Guarantee Fund has also contributed to the UN Global Sustainable Development Goal of Climate Action through facilitating financing of SMEs investing in green businesses. This is made possible through AGF’s Green Guarantee Facility. To-date, 11% of AGF’s portfolio contributes to reducing the effects of climate change.
AGF is confident that properly funded SMEs can drive the economic growth of African countries.
African Guarantee Fund is rated ‘AA-’ (Very Strong) by Fitch Ratings