Ecobank Group and the African Guarantee Fund (AGF) have inked a US$200million risk-sharing agreement aimed at propelling economic growth and bolstering entrepreneurial endeavours, particularly for women-owned SMEs, across the continent.
The strategic partnership agreement was signed during the Africa Financial Industry Summit (AFIS) held in Lomé, Togo, solidifying the third renewal of Ecobank’s collaboration with AGF.
Initially launched in 2013 with a US$50million guarantee covering seven countries, the agreement has expanded progressively. By 2018 it encompassed 14 countries, resulting in a cumulative disbursement of US$230million. Now, the renewed partnership extends to 27 countries within Ecobank’s African network; offering 50 percent coverage for qualifying SMEs across all targetted markets.
“This enhanced partnership with the African Guarantee Fund marks a significant step forward in our commitment to supporting SMEs across Africa with affordable financing,” stated Jeremy Awori, Ecobank Group CEO. “Through this partnership, we aim to eliminate the rigorous and restrictive requirements for collateral particularly hindering women-focused businesses’ access to credit.”
Jules Ngankam, African Guarantee Fund Group CEO, emphasised the transformative impact of the partnership on SMEs, highlighting: “The renewal of our partnership with Ecobank Group to now span 27 countries is proves the importance of risk-sharing mechanisms banks should leverage to grow their SME portfolios. This partnership will catalyse close to US$1billion of financing for SMEs, who are the real drivers of growth in African economies”.
The collaboration leverages Ecobank’s extensive network and financial expertise merged with AGF’s track record in risk mitigation, aiming to overcome challenges faced by SMEs in accessing affordable financing. Key highlights include an elevated 75 percent guarantee cover for Gender Financing and Green Transactions, fast-tracking more women-led and green transactions with reduced pricing.
“The US$200million facility allows Ecobank to significantly boost its lending capacity to SMEs, enabling the bank to extend more credit facilities to SMEs seeking to expand, innovate and contribute to job creation,” added Awori.
The risk-sharing agreement is poised to have a ripple-effect across sectors, contributing to increased economic activity, job creation and sustainable development across sub-Saharan Africa. It covers 27 countries: including Benin, Burkina Faso, Burundi, Cameroon, Cape Verde, Central African Republic, Chad, Congo, Côte d’Ivoire, Democratic Republic of Congo, Equatorial Guinea, Gabon, Ghana, Guinea Bissau, Guinea Conakry, Kenya, Mozambique, Nigeria, Rwanda, Senegal, Sierra Leone, South Sudan, Tanzania, Togo, Uganda, Zambia and Zimbabwe.
AGF, a specialised guarantee provider, aims to facilitate economic development and poverty reduction in Africa by increasing access to finance for Small and Medium-sized Enterprises (SMEs) across key economic sectors. Since its inception, AGF has unlocked over US$3.5billion in SME financing through partnerships with 200 financial institutions across 40 African countries.