African Guarantee Fund aims to reach 10,000 SMEs in Africa

Small and Medium Enterprises (SMEs) in Africa have lots of challenges, among them access to finance and so, the African Development Bank (AfDB) in 2011 established the African Guarantee Fund (AGF) to address the need for financing SMEs on the continent.

Speaking to ghanabusinessnews.com in an exclusive interview in Accra soon after the Development Finance Forum ended May 31, 2017, the CEO of the AGF, Felix Bikpo said the Fund is aiming to reach some 10,000 SMEs every year, from the current 4000.

He said the Fund exists to provide financial comfort to banks so they can lend to SMEs, considering the fact that banks mostly do short-term financing and the needs of SMEs are long-term.

“SMEs are the engine of sustainable growth to create jobs, bring development and to reduce poverty,” he said.

The AGF was set up to guarantee financing from commercial banks in Africa to SMEs. Since its establishment the Fund has relations with some 150 banks in 38 African countries.

“The AGF helps banks to transform short-term resources into long-term resources,” Bikpo said.

With a capital of $500 million, the Fund intends to leverage five times of that amount, he said.

By Emmanuel K. Dogbevi
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