Pan-African guarantee provider, African Guarantee Fund, and British International Investment, a development finance institution and impact investor from the United Kingdom, have inked a $75 million re-guarantee deal for Small and Medium Enterprises in Africa.
According to a release from BII, under the facility, AGF and BII will offer credit guarantees to partner financial institutions for up to 75% of the risk associated with SME loans, thereby enhancing the SMEs’ access to credit and lowering the need for collateral. As a result, over the course of the eight-year cooperation, partner financial institutions are anticipated to enable up to $150 million in loans to 17,300 SMEs.
It further stated that the cooperation would support financing to women-owned SMEs and SMEs with a focus on the environment.
The UK’s foreign secretary, James Cleverly, commented on the collaboration, ” “British International Investment is already a force for good in Kenya, supporting jobs and livelihoods in Africa. This investment shows that when we go together, we can go far.”
Constant N’zi, Deputy Group Chief Executive Officer and Group Chief Risk Officer, AGF, also said: “Our partnership with British International Investment marks our first engagement with a UK development finance institution and is the beginning of a journey that will positively impact African SMEs. Through this re-guarantee, our capacity to support lending institutions has been increased and we are certain of increased economic growth across the forty African countries wherein our guarantee products are utilized.”
Investment Director & Head of Intermediated Credit, BII, Jo Fry, added: “We are delighted to partner with African Guarantee Fund, a deeply impact-focused African institution, on this critical mission.”
The investment, according to AGF, will increase access to finance for SMEs across the African continent, with a focus on those in the most challenging contexts.
