The African Guarantee Fund for Small and Medium-Sized Enterprises (AGF) has today entered into a re- guarantee transaction with GuarantCo that will see African SMEs benefit from an amount of up to USD 74 million.
GuarantCo will increase its guarantee capacity for SME financing to help AGF support larger local currency transactions for SMEs involved in infrastructure.
While commenting on the GuarantCo AGF partnership, Felix BIKPO, AGF’s Chief Executive Officer stated, “AGF is glad to be joined by GuarantCo in bridging the infrastructure financing gap. This partnership aims to put in place an even stronger collaboration that will work on the entire value chain of infrastructure projects in Africa. We are looking forward to supporting other SMEs that work with key players in the infrastructure sector.”
SME’s have a large and growing impact on GDP in emerging markets and are a key source of job creation. Strengthening Africa’s infrastructure is critical for development as it is through this that African countries become more competitive at a global level.
Over the past 6 years, AGF has led the guarantee market in Africa by issuing financial guarantees to a tune of USD 690 million. This has enabled its partner financial institutions to issue loans estimated at USD 729 million to about 7600 African SMEs. GuarantCo is part of the Private Infrastructure Development Group, (PIDG), and is a global guarantee fund that has issued over USD 900 million of guarantees since inception in 2005 with a mandate to enable local currency finance for infrastructure.
“We are delighted to be able to partner with the African Guarantee Fund and increase support to SMEs active in the infrastructure sector in Africa. This collaboration between two local currency focussed guarantors offers the potential for us to engage local financial institutions and investors in financing the entire value chain in an African infrastructure project.” Lasitha PERERA, GuarantCo’s Chief Executive Officer said.