The African Guarantee Fund (AGF) has underscored the key role played by well-funded Micro, Small and Medium Enterprises in driving growth in African countries it joined the world in celebrating the International SME Day on June 27.
AGF said it acknowledged all stakeholders who are contributing towards supporting African SMEs.
“African Guarantee Fund’s objective is to help the private sector, mainly the Small and Mediumsized Enterprises (SMEs), to play the role of engine drivers of growth,” the fund said in a statement.
AGF achieves this by narrowing the financing gap, what it terms as the greatest obstacle to African SMEs. “AGF enables SMEs to increase sustainable growth and to be a source of employment, skills and wealth creation. In turn, this serves to reduce poverty throughout the continent.”
With three products, AGF extends risk-sharing guarantees to Partner Financial Institutions (PFIs) which acts as a catalyst to unlock resources to finance SME business activities. “This is achieved through provision
of its three products – Loan, Fundraising and Equity guarantees to financial institutions for onward
lending to SMEs.”
It also provides capacity development assistance, both to PFIs and SMEs.
“This is a category of SMEs who would otherwise be locked out of the financial market due to lack of sufficient collateral required by most financial institutions,” AGF said
So far, AGF has issued almost Ksh100 billion worth of guarantees which has been leveraged by its PFIs to avail about Ksh200 billion of financing to SMEs.