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The African Development Bank approved an additional US $ 10 million capital investment in the African Guarantee Fund for SMEs. This support will enable the Fund to continue to secure loans to small and medium-sized enterprises in Africa, thereby stimulating the development of private enterprises and the creation of sustainable jobs.
The African Guarantee Fund was established in 2012. Designed and established by the African Development Bank in collaboration with the Danish Ministry of Foreign Affairs and the Spanish Agency for International Cooperation for Development. The French Development Agency and the Nordic Development Fund then joined the Fund. Its mandate was to close the financing gap for local SMEs in high-impact sectors and to promote job creation by providing financial guarantees to financial institutions covering their SME lending and thus catalyzing private sector resources. to finance SMEs.
up to now implemented its commercial activities in 38 countries, including 12 countries in transition across Africa. He has collaborated with 84 financial intermediaries, allowing banks to increase the financing available for SME loans of about 1.2 billion US dollars. More than 8,600 SMEs benefited from loans guaranteed by AGF, creating around 86,510 jobs. About 60% of these jobs were created for young people and 30% for women.
Stefan Nalletamby, director of the Financial Sector Development Department, said the investment would strengthen AGF and help broaden and deepen African local financial systems. With the support of the Bank, AGF will continue to catalyze lending to critical sectors such as manufacturing and trade, renewable energy, housing, health, education, the financial sector and the economy. Agriculture, in line with Bank priorities. Nourishing Africa and improving the quality of life of African people
The transaction also offers the opportunity to mobilize public resources to further stimulate financing of the real economy by the private sector, amplifying thus their scope and impact.
The financing complements the Bank's current initiatives to help develop private sector financing through financial institutions and capital markets, particularly to advance SME financing. The Bank is committed to supporting approaches that increase domestic resource mobilization through increased intermediation and the deepening of financial systems in Africa.
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