LAGOS, Nigeria – United Bank for Africa (UBA) and the African Guarantee Fund (AGF) have signed a partnership that will see UBA provide $100 million in new loans to Small and Medium Enterprises (SMEs) and business owners in 20 African countries where the bank has a presence.
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 full of small business clients across the continent, paying particular attention to businesses under the women and in green finance projects.
The Group Managing Director of UBA, Oliver Alawuba, who spoke during the signing ceremony of the partnership 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 women founded and managed businesses, given its strong network, which is spread across 20 African countries and major global financial capitals.
She said, “This guarantee will serve as a catalyst for the bank’s intervention in MSME, women-led and eco-friendly businesses, enabling 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 last September, 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, on customer-friendly terms, with the aim of bridging the significant $42 billion financing gap faced by women in Africa,” noted Alawuba.
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 Finance offerings 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 2023, which will help the Bank advance its $6 billion commitment for SMEs across Africa under the AfCFTA initiative/ /ends.
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