2023-11-21 10:05:47
African Guaranter Fund (AGF), a pan-African institution specializing in the granting of guarantees and the Ecobank group, signed this Thursday, November 16, 2023 in Lomé, on the sidelines of the 3rd edition of the Africa Financial Industry Summit (AFIS), a risk sharing agreement amounting to 200 million US dollars.
Belmondo ATIKPO
Ecobank, the pan-African banking group based in Lomé, will benefit from additional support from the African Guarantee Fund (AGF) to strengthen its support to African SMEs. The two players signed a risk-sharing agreement worth $200 million in the Togolese capital to stimulate economic growth in Africa. This agreement, concluded on the sidelines of the Africa Financial Industry Summit (AFIS) which is being held in Lomé this week, aims in particular to support businesses on the continent, with an emphasis on SMEs led by women and green projects. The strengths of the partnership are as follows: enhanced guarantee coverage to 75% for financing women-led businesses and green projects, increased lending capacity, risk mitigation, financial inclusion and economic impact. “Our strengthened partnership with the African Guarantee Fund marks an important milestone in our commitment to supporting SMEs across Africa by providing them with affordable financing. Through this partnership, we are taking bold steps to improve green financing and financing for women-led businesses”welcomed Jeremy Awori, Managing Director of the Ecobank Group. “In doing so, we aim to eliminate stringent and restrictive collateral requirements, which particularly hinder access to credit for women-led businesses.” “This partnership will catalyze nearly $1 billion in financing for SMEs, which are the true engines of growth of African economies. », indicated for his part, Jules Ngankam, general director of the African Guarantee Fund group, welcoming the collaboration between these two institutions, on the sidelines of the Lomé meeting. The countries covered by this partnership are: Togo, Benin, Burkina Faso, Burundi, Cameroon, Cape Verde, Congo, Ivory Coast, Gabon, Ghana, Guinea Bissau, Guinea Conakry, Equatorial Guinea, Kenya, Mozambique, Nigeria, Uganda, Central African Republic, Rwanda, Senegal, Sierra Leone, South Sudan, Tanzania, Chad, Zambia and Zimbabwe. The agreement initialed by Ecobank Group Director, Jeremy Awori and AGF Director, Jules Ngankam, also aims to address the challenges faced by SMEs in accessing affordable financing.
Note that this agreement marks the strengthening of the collaboration between Ecobank and AGF. Indeed, the Pan-African Guarantee Fund initially provided a guarantee for seven countries in 2013 with a total guaranteed portfolio of $50 million. This guarantee was extended in 2018 to 14 countries, resulting in cumulative disbursements of $230 million since then.
Read the press release
Ecobank Group and African Guarantee Fund Sign Transformative Risk-Sharing Agreement Worth USD 200 Million
It is the largest guarantee mechanism in sub-Saharan Africa.
The risk sharing agreement marks the third renewal of the partnership between the Ecobank Group and AGF.
SMEs in the 27 African markets in which Ecobank operates will benefit from this partnership, while only 7 countries benefited from this partnership in 2013.
The agreement provides favorable loan conditions for financing women-led businesses and green projects.
Lomé, Togo, November 16, 2023 – Ecobank, the leading pan-African banking group, and African Guarantee Fund (AGF), a pan-African guarantee institution, have joined forces in an innovative 200 million risk-sharing agreement USD, aimed at stimulating economic growth and supporting businesses – particularly women-owned SMEs – on the continent.
The two organizations signed a strategic partnership agreement today on the sidelines of the Africa Financial Industry Summit (AFIS) in Lomé, Togo, in the presence of their leaders.
The USD 200 million risk sharing agreement marks the third renewal of the partnership between Ecobank and AGF. The initial guarantee provided by AGF in 2013 covered seven countries with a total guaranteed portfolio of USD 50 million. In 2018, the scope of the guarantee expanded to encompass 14 countries, resulting in cumulative disbursements of USD 230 million since then. The renewed partnership now covers 27 countries within Ecobank’s African network, providing 50% coverage for eligible SMEs across all target markets.
Drawing on Ecobank’s extensive network and financial expertise and combining them with AGF’s proven experience in risk mitigation, this collaboration aims to address the challenges faced by SMEs in accessing affordable financing.
The strengths of the partnership are as follows:
Guarantee coverage improved to 75% for financing women-led businesses and green projects: Favorable conditions have been set to accelerate the implementation of more transactions related to women-led businesses and green projects, with reduced costs.
Increase in lending capacity: The USD 200 million facility allows Ecobank to significantly increase its SME lending capacity, giving it the opportunity to extend more credit facilities to SMEs who wish to grow, innovate and contribute to job creation.
Risk mitigation: AGF will play a central role in mitigating the credit risk associated with SME lending, creating a more conducive environment for financial institutions to support these businesses without compromising their risk profile.
Financial inclusion: By directing funds to SMEs, the collaboration aligns with broader goals of inclusive
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QA November 21, 2023
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