Nigeria: GTBank and AFD unveil partnership to boost SME development
The initiative is designed to improve financing for start-ups.Guarantee Trust Bank (GTB) has launched a N3 billion (€13.3 million) scheme to promote the development of small and medium-sized enterprises (SMEs) in Nigeria, in partnership with Agence Française de Development (AFD).
In a statement seen by the News Agency of Nigeria, the AFD said the initiative was designed to boost financing for business start-ups and development projects in Nigeria.
The scheme provides banks, private equity investors and other financial institutions a safer platform to increase participation in SME financing by providing foreign guarantees to local credit facilities advanced to SMEs.
"The partnership with GTBank, which is the first in Anglophone Africa, will support the growth of SMEs by providing a risk sharing mechanism on loan advances," the AFD said.
Denys Gauer, the French Ambassador to Nigeria, added that in spite of the widespread presence of SMEs in Nigeria, the sector faces major obstacles, including limited access to bank financing, mostly because of the risk factor associated with SMEs.
He said the scheme will facilitate SMEs' access to finance by supporting the development of the GTBank portfolio of SME loans.
SMEs are increasingly being targeted by Nigerian banks. Ecobank and First City Monument Bank (FCMB) have also both launched new initiatives this year to attract and contribute to developing small businesses in the country.