The African Guarantee Fund (AGF) and United Bank for Africa (UBA) have inked a partnership geared towards bolstering Small and Medium Enterprises (SMEs) across 20 African nations.
As per a statement from UBA on Monday, under this agreement, the AGF will extend support and guarantee to SMEs through a $50 million Portfolio Guarantee.
Additionally, the collaboration aims to facilitate extensive capacity development for UBA’s small business customers across the continent, with a particular emphasis on women-led businesses and green finance initiatives.
Speaking during the partnership signing ceremony at UBA’s Head Office in Lagos, UBA’s Group Managing Director, Oliver Alawuba, reiterated the bank’s steadfast commitment to empowering SMEs in Africa, with a special focus on women-founded and managed enterprises.
Alawuba emphasized UBA’s role as a global bank dedicated to the advancement of Africa’s economic landscape.
“This guarantee will serve as a catalyst for the bank’s intervention for SME business, women-led and environment-friendly businesses, enabling us to further extend our reach and impact.
“Additionally, the extensive capacity development initiatives planned for our SME customers across 20 African countries align with our vision to empower businesses, drive innovation, and foster sustainable growth.” He stated.
“I’m particularly excited about our focus on advancing the AfCFTA initiative, reaffirming UBA’s $6 billion commitment to SMEs across Africa. This initiative, announced in September last year, demonstrates our dedication to supporting the economic integration of our continent.”
He highlighted that the bank’s dedication to advancing gender equality was evident in its collaboration with the Affirmative Finance Action for Women protocol.
“Through this, we will provide loans to women-owned SMEs at more concessional rates, with customer-friendly collateral terms, aiming to bridge the significant financing gap faced by women in Africa, amounting to $42 billion,” Alawuba confirmed.
The Group CEO of the African Guarantee Fund, Jules Ngankam, emphasized that the partnership between two pan-African institutions, both leading in catalyzing the growth and development of SMEs, would play a crucial role in driving economic growth across the continent.
“Despite being the backbone of all African economies, small and medium enterprises (SMEs) are perceived as risky, resulting in limited access to financing, even though they account for 90 percent of the private sector and 60 percent of all jobs,” he remarked.
“Through this guarantee facility and the technical capacity development grant support, we will de-risk SMEs, with a priority on those owned or led by women and those within the green sector,” he added.
This partnership builds on an announcement made by UBA and the Africa Continental Free Trade Area Secretariat in September 2024.
It will assist the bank in fulfilling its $6 billion commitment to SMEs across Africa under the AfCFTA initiative.
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