Nordic Development Fund Managing Director Pasi Hellman with  African Guarantee Fund: CEO Felix Bikpo Bduring the signing ceremony that saw AGF increase its capital to $26 million. Photo / Business Today

The African Guarantee Fund for Small and Medium-Sized Enterprises (AGF) on 21st June  2018 received a capital injection of $26 million (Ksh2.6 billion) from Investment Fund for Developing Countries (IFU). This  is the first of a three-phase fund-raising that will be completed over the next five years.

The investment fund has joined AGF as a new partner with a capital of $15.5 million and a $2 million grant to AGF’s Capacity Development Trust.

The Nordic Development Fund, one of the fund’s shareholders, has increased its stake by $10.4 million and a further Capacity Development grant of $1.5 million. Nordic Development Fund’s shareholding focuses on green financing achieved through AGF’s Green Guarantee Facility that was launched in 2015, with an aim of increasing access to finance for climate and green-growth oriented SMEs.

A pan-African provider of financial guarantees to banks and other lending institutions across the continent, AGF’s key objective is to reduce the SME financing gap currently standing at $155 billion by 1% by raising $420 million through a ‘blended finance’ mechanism.

RELATED: 4 SIMPLE WAYS TO GET FUNDING FOR YOUR BUSINESS

AGF is the first African institution wholly dedicated to mobilizing private resources for SME development on and has over the past six years, led the guarantee market in Africa by issuing guarantee products to financial institutions that have made available $1.4 billion of financing for SMEs in Africa.

“Strengthening Africa’s SMEs is critical for development as it is through this that African countries become more competitive at a global level. With this increased capacity, AGF will be able to support larger local currency transactions for SMEs involved in all sectors with a priority on Energy, Infrastructure, Agri-business and Green Growth,” AGF Chief Executive Officer, Felix BIKPO.

This capital injection will enable the AA- Fitch rated guarantee fund to continue working together with financial institutions towards a sustainable economic growth in Africa.

NEXT: KENYAN TOWN THAT BREEDS BIG BUSINESSES

LEAVE A REPLY

Please enter your comment!
Please enter your name here