The African Guarantee Fund (AGF) and United Bank for Africa (UBA) yesterday signed a partnership that ensures that UBA provides $100 million in new loans to Small and Medium Enterprises (SME) and business owners across the 20 African countries where the bank has presence in Africa.
The AGF under this agreement will support and guarantee SMEs with $50 million Portfolio Guarantee as well as facilitate extensive capacity development for the bank’s teeming customers who run small businesses across the continent, paying special attention to women-led businesses and green finance projects.
UBA’s Group Managing Director, Oliver Alawuba, who spoke during the partnership signing ceremony between both institutions at the UBA Head Office in Lagos, on Monday, said that as Africa’s Global Bank, UBA remains committed towards supporting SMEs in Africa, especially to women founded and managed businesses, given its robust network, which is spread across the 20 countries in Africa and major global financial capitals.
He said, “This guarantee will serve as a catalyst for the bank’s intervention for SME business, women-led and environment friendly businesses, enabling us to further extend our reach and impact. Additionally, the extensive capacity development initiatives planned for our SME customers across 20 African countries align with our vision to empower businesses, drive innovation, and foster sustainable growth.”
“I am particularly excited about our focus on advancing the AfCFTA initiative, reaffirming UBA’s $6 billion commitment to SMEs across Africa. This initiative, announced in September last year, demonstrates our dedication to supporting the economic integration of our continent,” he further said.
“Moreover, our commitment to promoting gender equality in our business is reflected in our collaboration with the Affirmative Finance Action for Women(AFAWA) protocol. Through this we will provide loans to women-owned SMEs at more concessional rates, with customer friendly collateral terms, aiming to bridge the sinificant financing gap faced by women in Africa, amounting to $42 billion,” Alawuba noted.
In the same vein, capacity development platforms are to be extended for free or at highly discounted rates while the partners will engage with governments across Africa to create and activate business environments that are more women friendly. It will also expand the Bank’s Green Finance propositions across Africa.
Speaking at the signing ceremony, the Group CEO of African Guarantee Fund, Jules Ngankam, said the partnership between two pan-African institutions who are both at the forefront of catalysing growth and development of SMEs will significantly drive economic growth across the continent. “Small and medium enterprises despite being the backbone of all African economies – they account for 90% of the private sector and 60% of all jobs – are perceived as risky and therefore have limited access to financing.
