Ecobank, AGF sign USD 200mn deal to fund SMEs
Ecobank and the African Guarantee Fund (AGF), a specialized pan-African guarantee provider, have joined forces in a groundbreaking USD 200 million risk-sharing agreement, aimed at catalysing economic growth and supporting entrepreneurial ventures – including women-owned SMEs on the continent.
The risk-sharing agreement marks the third renewal of Ecobank’s partnership with AGF. The initial guarantee, provided by AGF in 2013, covered seven countries with a total guaranteed portfolio of USD 50 million. In 2018, the scope of the guarantee expanded to encompass 14 countries, resulting in cumulative disbursements of USD 230 million since that time. The renewed partnership now extends to 27 countries within Ecobank’s African network, offering 50% coverage for qualifying SMEs across all target markets.
By leveraging Ecobank’s extensive network and financial expertise and merging it with AGF’s proven track record in risk mitigation, the collaboration aims to address the challenges faced by SMEs in accessing affordable financing.
Commenting on the partnership Mr Jeremy Awori, Ecobank Group CEO expressed enthusiasm about the potential impact on SMEs and the overall economic landscape. “Our enhanced partnership with the African Guarantee Fund marks a significant step forward in our commitment to supporting SMEs across Africa with affordable financing. Through this partnership, we are taking bold steps to enhance green financing and gender financing. In doing so, we aim to eliminate the rigorous and restrictive requirements for collateral, particularly hindering women-focused businesses’ access to credit,” he said.
African Guarantee Fund Group CEO, Mr Jules Ngankam acknowledged the longstanding partnership between AGF and Ecobank Group and its transformative impact on the SME landscape. “The renewal of our partnership with Ecobank Group to now span 27 countries is proof of the importance of risk-sharing mechanisms that banks should leverage to grow their SME portfolio. This partnership will catalyse close to USD 1 billion of financing for SMEs, who are the real drivers of growth in African economies”, he said.
This agreement is positioned to become a landmark initiative in the financial landscape of Sub-Saharan Africa, demonstrating the collaborative efforts of key players in driving economic growth and fostering entrepreneurship.
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