African Guarantee Fund commemorates one year

The AGF, designed and funded by the AfDB in partnership with the governments of Denmark and Spain, provides financial guarantees to financial institutions to stimulate financing to SMEs and unlock their potential to deliver inclusive growth in the region. The fund was launched with $50 million fund and is currently in nine African countries, namely: Kenya, Tanzania, Uganda, Cameroon, Ghana, Sierra Leone, Senegal, Mozambique and Zambia; but targets to increase its reach gradually to cover the whole of Africa.

During the event, the CEO of AGF, Felix Bikpo commented that a strong and vibrant SME sector provides a strong foundation to increase standards of living and to reduce poverty.

"AGF is the missing link to the scaling up of African SME financing; we reduce the risk taken by institutions financing SMEs by making it easy to extend loans to them," said Bikpo. "Through AGF, we can now give a voice to African perspectives on Africa's development challenges and solutions by supporting financial institutions to enable them to finance SMEs in Africa."

During the session, which brought together African and international entrepreneurs, banks, other financial institutions, investment funds, central banks, government agencies, the AGF showcased its achievements in the African countries through the clients acquired in its one year of existence.

Inadequate access to capital has been cited as a key challenge to the development of SMEs in Africa. Many lending institutions shy away from financing them because they are considered risky. The African Guarantee Fund has the capacity and leadership to effectively help accelerate development in Africa.