African Guarantee Fund aims to raise $500m capital by 2016

The African Guarantee Fund (AGF) is seeking to raise about $500 million in guarantee capital in the next three years.

According to the AGF, it is likely to get additional capital from bilateral donors and development finance institution (DFIs).

“…in the next one to three years, we are in the process of increasing our capital to $500 million,” AGF Chief Executive Officer Mr Felix A. Bikpo said at a sideline event at the just-concluded 2013 African Development Bank Annual Meetings.

The event was to celebrate the Fund’s first year anniversary. The AGF was launched at last year’s AfDB Meetings in Arusha, Tanzania to help provide financing for SMEs in Africa.

According to Mr Bikpo, the Fund anticipates that through leveraging its guarantee capital by three times, it “will generate approximately $2 billion of new lending to SMEs”.

He says this will have an impact on at least 10,000 African SMEs which at the long run will create wealth and jobs.

Mr Bikpo mentioned the prospect of partnering with organizations such as the Swedish International Development Cooperation Agency (SIDA), Islamic Development Bank among others. “It will enable us to progress further in our objectives for the continent,” he said.

The AGF is currently a joint venture between the AfDB, the Danish and Spanish governments.

By Ekow Quandzie back from Marrakech, Morocco