Both the African Guarantee Fund and United Bank for Africa have signed a collaboration that will benefit Small and Medium Enterprises across 20 African countries.
The United Bank for African said in her speech on Monday that, the AGF under this agreement will support and guarantee SMEs with a $50m Portfolio Guarantee as well as facilitate extensive capacity development for the bank’s 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 made this known during the partnership signing ceremony at the bank’s Head Office in Lagos, said that as Africa’s global bank, UBA remained committed to supporting SMEs in Africa, especially to women-founded and managed businesses.
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’m 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 stressed that the bank’s commitment to promote gender equality was reflected in its partnership with the Affirmative Finance Action for Women protocol.
“Through this, we will provide loans to women-owned SMEs at more concessional rates, with customer-friendly collateral terms, aiming to bridge the significant financing gap faced by women in Africa, amounting to $42bn,” Alawuba affirmed.
Meanwhile, Jules Ngankam, the Group CEO of the African Guarantee Fund, declared that the collaboration between the two pan African institutions that are both at the forefront of creating growth and development of SMEs would significantly drive economic growth across the continent.
“Small and medium enterprises despite being the backbone of all African economies – they account for 90 per cent of the private sector and 60 per cent of all jobs – are perceived as risky and therefore have limited access to financing.
“Through this guarantee facility and the technical capacity development grant support, we will de-risk SMEs with a priority on those that are owned or led by women and those that are within the green sector,” he said.
The collaboration follows an announcement made by UBA and the Africa Continental Free Trade Area Secretariat in September 2024. The partnership will help the bank fulfil its $6bn commitment to SMEs across Africa under the AfCFTA initiative.
