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