A financial boost for African SMEs
SMEs in Africa's infrastructure sector will soon benefit from GuarantCo's re-guarantee facility.
Developing Africa’s infrastructure is critical for development, as it is through this that African countries become more globally competitive. With this in mind, the African Guarantee Fund for small and medium-sized enterprises (AGF) has entered into a re-guarantee transaction with GuarantCo, part of the Private Infrastructure Development Group (PIDG), to increase its capacity for SME financing.
The AGF is a leader in Africa’s guarantee market, having issued financial guarantees to the tune of $690 million since its launch on 1 June 2012. These guarantees enabled its partner financial institutions to issue loans estimated at $729 million to African SMEs.Felix BIKPO, AGF’s CEO, said:
“AGF is glad to be joined by GuarantCo in providing the missing link for financial institutions to execute SME financing strategies effectively and bridging the infrastructure financing gap. This partnership will expand our capacity to enhance SME financing and mitigate risk to catalyse private sector development on the continent.”
Through the increased capacity of $74 million brought about by the re-guarantee facility, AGF can now guarantee financing beyond its current limit, while GuarantCo will be able to guarantee financing below their current limit.
The transaction will provide a platform for GuarantCo to support AGF and partner with financial institutions supporting SMEs in the infrastructure sector, and will also facilitate local currency investment into infrastructure.
Pictured: Felix Bikpo, AGF CEO (left), Lasitha Perera, GuarantCo CEO (right)