The African Guarantee Fund (AGF) and Equity Group Holdings Plc have expanded their strategic cooperation through a USD 500 million framework, further solidifying their commitment to assisting MSMEs.
According to the Equity Group’s statement released on Friday, this facility will enable Equity Group to expand its lending operations to MSMEs, allowing these companies to access USD 1 billion in funding.
Initiative aims to generate 50,000 jobs
The project is expected to generate or maintain more than 50,000 jobs. This renewed arrangement, which builds on a strong cooperation that was formed in 2018 and later expanded with a USD 75 million facility in 2020, is the largest single guarantee engagement in AGF’s history.
It focuses on MSMEs in the Democratic Republic of the Congo (DRC), Rwanda, Tanzania, Kenya, and Uganda, with ambitions to expand to future Equity Group businesses over the course of the next ten years.
The first USD 115 million tranche, already committed to the five core subsidiaries, will be the first of three phases of the framework’s implementation. It will include loans to MSMEs, with an emphasis on green, women-owned, and youth-led businesses.
AGF-Equity partnership enabled 2000 MSMEs to access over $160 million in loans
The AGF-Equity cooperation has so far enabled approximately 2,000 MSMEs, including 500 women-led and 900 youth-led enterprises, to access more than USD 160 million in loans.
Equity Group Managing Director and CEO Dr. James Mwangi said, “This expanded partnership with the African Guarantee Fund underscores our shared vision of empowering MSMEs, which are the backbone of African economies.”
He continued, “By enhancing access to finance and promoting sustainable business practices, we are investing in the future of our communities, preserving jobs, and driving inclusive growth across the region.
“We see a unique opportunity to deepen our focus on high-impact SME sub-sectors, including agriculture and women- and youth-led enterprises, among others. These are central to our Africa Recovery and Resilience Plan (ARRP), which emphasises the power of collaboration and strategic partnerships to unlock transformative growth,” he added.
Noting the expected effects of the restored collaboration, Jules Ngankam, CEO of AGF Group, stated, “Our renewed partnership with Equity Group further increases our footprint and impact in the region.”
“By supporting the Bank to accelerate SME financing, we envision several development impact indicators, including increasing the number of people employed and engaged in businesses and growth of enterprises from one stage to another, for instance, from Small to Medium enterprises,” he said.
USD 3 billion support for women-led businesses in Africa
The collaboration makes use of Equity’s African Development Bank cooperation through the Affirmative Finance Action for Women in Africa (AFAWA) Guarantee for Growth initiative, which seeks to enable financial institutions to provide up to USD 3 billion in financing for women-owned small and medium-sized enterprises in Africa.
The Equity Group Foundation will give technical assistance and increased guarantee coverage to women entrepreneurs as part of the risk-sharing arrangement between AGF and Equity. This will help close the gender finance gap.
Support for Green Financing and Blue Economy’s initiative
The two organisations are also working together to support Blue Economy and Green Financing initiatives, showcasing their shared dedication to environmental and natural sustainability by supporting green and blue projects through Equity Group’s innovative solutions for sustainable freshwater and coastal livelihoods and AGF’s Green Guarantee Facility.
Furthermore, AGF will keep assisting Equity Group through its Capacity Development program by providing thorough training courses for the bank’s employees, with a particular emphasis on improving gender-smart investment.
Equity Group and AGF are still dedicated to collaborating to make sure that this upgraded facility benefits the MSMEs in the region and is in line with the UN Sustainable Development Goals (SDGs) and Africa’s Agenda 2063. This will further the institutions’ shared goal of using inclusive finance to change lives.
