- UBA to finance women-led SMEs, Green Finance with $100 million
- AGF provides $50m portfolio guaranteetechnical assistance
The African Guarantee Fund (AGF) and United Bank for Africa (UBA) on Monday signed a partnership that will see UBA provide $100 million in new loans to Small and Medium Enterprises (SMEs) and business owners in the 20 African countries where the bank has a presence in Africa.
AGF under this agreement will support and underwrite SMEs with a $50 million Portfolio Guarantee, as well as facilitate extensive capacity building for the Bank’s teeming clients running small businesses across the continent, paying particular attention to businesses under women and in green finance projects.
The Group Managing Director of UBA, Oliver Alawuba, who spoke during the collaboration signing ceremony between the two institutions at the UBA Head Offices in Lagos on Monday, said that as Africa’s Global Bank, UBA remains committed to supporting SMEs in Africa, especially businesses founded and run by women, given its strong network spread across 20 African countries and major global financial capitals.
He said,
- “This guarantee will catalyze the bank’s outreach to SME, women-led and eco-friendly businesses, allowing us to further expand our reach and impact.
- In addition, the extensive capacity building initiatives planned for our SME clients in 20 African countries align with our vision to empower business, drive innovation and promote sustainable development.”
- “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 commitment to supporting the economic integration of our continent.” he further said.
- “Furthermore, our commitment to promoting gender equality in our business is reflected in our partnership with the Affirmative Finance Action for Women (AFAWA) protocol.
- Through this we will provide loans to women-owned SMEs at more favorable interest rates, with customer-friendly collateral terms, with the aim of bridging the significant $42 billion financing gap faced by women in Africa.” Alauba noted.
In the same vein, capacity building platforms will be scaled up for free or at deep discounts, while partners will work with governments across Africa to create and enable more women-friendly business environments. It will also expand The Bank’s Green Financing Proposals across Africa.
Speaking at the signing ceremony, the Group CEO of the African Guarantee Fund, Jules Ngankam, said the collaboration between two pan-African institutions that are both at the forefront of catalyzing the growth and development of SMEs will significantly drive economic growth across the continent.
- “SMEs, despite being the backbone of all African economies – accounting for 90% of the private sector and 60% of all jobs – are considered risky and therefore have limited access to finance. Through this guarantee mechanism and grant support for technical capacity development, we will de-risk SMEs with a priority on those owned or managed by women and those in the green sector.
This partnership follows on from the announcement made by United Bank for Africa (UBA) Plc and the Africa Continental Free Trade Area (AfCFTA) Secretariat in September 2024 which will help the Bank advance its $6 billion commitment to SMEs across Africa under the AfCFTA initiative
United Bank for Africa is one of the largest employers in the financial sector on the African continent, with 25,000 employees across the group and serving over 35 million customers worldwide.
Operating in 20 African countries and in the United Kingdom, United States of America, France and the United Arab Emirates, UBA provides retail, commercial and institutional banking services, leading financial inclusion and applying cutting-edge technology.
The African Guarantee Fund (AGF) is a specialized guarantee provider whose mission is to facilitate economic growth and poverty reduction in Africa.
To achieve this, the AGF increases access to finance for Small and Medium Enterprises (SMEs) in key economic sectors through a range of guarantee products and capacity building assistance.
Since its inception, AGF has unlocked more than $3.5 billion in SME financing through partnerships with 200 partner financial institutions in 40 African countries.
AGF is supported by the following shareholders and donors: The Government of Denmark through the Danish International Development Agency (DANIDA), the Government of Spain through the Spanish Agency for International Cooperation (AECID), the African Development Bank (AfDB), the French Development Agency (AFD), Nordic Development Fund (NDF), Investment Fund for Developing Countries (IFU), German Development Bank (KfW), French Agency for Private Sector (PROPARCO), West African Development Bank (BOAD), Global Affairs Canada (GAC) , USAID’s West Africa Trade and Investment Center (WATIH), TechnoServe and the Norwegian Agency for Development Cooperation (Norad). The African Guarantee Fund is rated AA- by Fitch Ratings.
AFAWA is a pan-African initiative of the African Development Bank Group that aims to close the $42 billion financing gap for women in Africa through integrated support.
AFAWA aims to unlock $5 billion in funding for women-owned and women-led small and medium-sized businesses by 2026.
AFAWA is supported by partners and donors the African Development Bank, the G7 countries, the Netherlands and Sweden, and the Women’s Enterprise Financing Initiative (We-Fi).
Through AFAWA, the African Development Bank has approved $1.5 billion in investments for women entrepreneurs in 32 countries, through 96 financial institutions.