This is a guarantee that covers initial capital investment loss for investors providing equity or quasi equity to Small and Medium-sized Enterprises.
The Equity Guarantee (EG) provide an alternative source of financing to SMEs facing difficulties in accessing Bank financing due to their weak financial structure.
- Coverage: 50%
- USD 1,000,000 (Depending on the tiering of the financial institution)
- Enables PFIs scale-up equity capital financing of SMEs with promising outlook, but relatively weak financial structures as well as those in the seed and start-up phase, mezzanine financing and risk capital operations;
Through the Capacity Development component of the EG
- Develops and strengthens the skills, management practices, strategies, systems, competencies and abilities of PFIs to effectively increase their SME financing business;
- Assists SMEs enhance their business managerial capabilities especially in areas which include among others, governance, human capital management, quality control, packaging, financial management, and marketing
- The request must be from Private Equity Funds or Venture Capitals targeting SMEs
- The target of the Equity Guarantee cuts across all sectors with an exception of those listed in AGF’s exclusion list.