AGF to assist African SMEs

Oct 26, 2010

Small and medium-sized enterprises (SMEs) across Africa are set to benefit from the establishment of the African Guarantee Fund (AGF).

Formed to improve financial resources for businesses throughout African nations, the fund is backed by Spain, Denmark and the African Development Bank (AfDB). A $10 million (€7.16 million) loan to the fund - which aims to raise $300 million of capital in the medium term - has been approved by the AfDB and Leila Mokaddem, Division Manager in Charge of Financial Institutions in the Private Sector Department at the bank, stated it will help growing firms gain access to finance.

"The AGF-guarantee products will provide support to banks willing to commit to specific and ambitious targets for SME business lending," she was quoted by the East African as saying.

Initial capital for the project - which will be based in Nairobi, Kenya and domiciled in Port Louis, Mauritius - stands at $50 million.