The AfDB invests $125 million for SME access to long-term financing in Africa
The African Development Bank (AfDB) approved on July 22nd a $125 million (€94.5 million) program dedicated to micro, small and medium-sized enterprises (SMEs) in Africa.The African Development Bank (AfDB) approved on July 22nd a $125 million (€94.5 million) program dedicated to micro, small and medium-sized
enterprises (SMEs) in Africa.
It will be complemented by a series of technical assistance measures, equivalent to a gift of $3.98 million, from the Fund for African Private Sector Assistance (FAPA), the AfDB said in a statement.
The objective of the program is to strengthen SME access to long-term financing, thus fostering job creation, poverty reduction and social inclusion.
It is also expected to contribute to strengthening
the capital market, boosting
private sector growth and
The program will grant credit lines in local currency as well as technical assistance to targeted financial institutions, particularly in low-income countries of the five sub-regions of Africa.
The SME sector is crucial for growth in Africa, contributing to more than 45 percent of employment and 33 percent of GDP on the continent, according to figures from the AfDB.
However, more than 70 percent of SMEs have poor access to long-term credit, particularly because they are often not able to provide the guarantees required by commercial banks.