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Loan Individual Guarantee

Product Description

This is a facility that guarantees a loan made by a Partner Financial Institution to a qualifying borrower for which parameters have been defined and the proceeds go to a specific known borrower.

The Loan Individual Guarantee (LIG) enables the guaranteed party to scale-up its lending activities to the specific qualifying borrower.

Key Features

  • Coverage: 50%
  • Limit: USD 2,500,000 (Depending on the tiering of the financial institution)

Benefits

  • Assists PFIs scale up their SME lending activities in situations where their target SME clients are unable to meet collateral threshold requirements;
  • Improves the solvency (regulatory capital) ratios of banking partners and thus enabling them to have a better leverage on their capital;

Through the Capacity Development component of the LIG

  • 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

Eligibility Criteria

  • The borrower must be a formally registered Small and Medium-sized Enterprise;
  • The target of the Loan Individual Guarantee cuts across all sectors except the ones with an exception of those listed in AGF’s exclusion list.

other products

African Guarantee Fund contributes to the promotion of economic development in Africa through provision of Partial Guarantees & Capacity Development to Financial Institutions to facilitate access to finance for Small and Medium-sized Enterprises.