Ecobank, African Guarantee Fund sign $200m pact to boost economic growth, empower SMEs
In a landmark move aimed at catalyzing economic growth and supporting entrepreneurship, Ecobank and the African Guarantee Fund (AGF) have inked a groundbreaking $200 million risk-sharing agreement. This strategic collaboration, signed on the sidelines of the Africa Financial Industry Summit (AFIS) in Lomé, Togo, aims to provide critical financial support to entrepreneurial ventures, with a particular focus on women-owned SMEs across the continent.
The agreement, marking the third renewal of Ecobank’s partnership with AGF, extends to 27 countries within Ecobank’s extensive African network. The initial guarantee, established in 2013, has grown exponentially over the years, with cumulative disbursements reaching $230 million since the expansion of the guarantee in 2018.
Key highlights of the partnership include an enhanced 75% guarantee cover for Gender Financing and Green Transactions, promoting inclusivity and sustainability. The agreement significantly increases Ecobank’s lending capacity to SMEs, fostering job creation and innovation. AGF’s role in mitigating credit risk associated with SME lending aims to create a conducive environment for financial institutions to support businesses without compromising risk profiles.
The partnership aligns with broader financial inclusion objectives, ensuring that a diverse range of businesses, including those in underserved areas, can access affordable financing for growth. The $200 million risk-sharing agreement is expected to have a ripple effect on various sectors, contributing to increased economic activity and sustainable development across sub-Saharan Africa.
Jeremy Awori, CEO of Ecobank Group, expressed enthusiasm about the partnership’s potential impact on SMEs and the broader economic landscape. The collaboration seeks to eliminate rigorous collateral requirements, especially hindering women-focused businesses’ access to credit. Jules Ngankam, CEO of African Guarantee Fund Group, highlighted the transformative impact of the partnership on the SME landscape, anticipating close to $1 billion of financing for SMEs.
The agreement not only exemplifies the collaborative efforts of key players but positions itself as a landmark initiative in the financial landscape of Sub-Saharan Africa. As the partnership unfolds across 27 countries, it is poised to play a pivotal role in driving economic growth and fostering entrepreneurship throughout the region.