African Guarantee Fund eyes SMEs with Sh2.6bn funding kitty
Small and medium sized companies are set to benefit from Ksh2.6 billion in funding from the African Guarantee Fund.
The funding comes as a bridge for SMEs that have remained locked out of the formal credit market since the introduction of interest rate caps in 2016.
The funding will be able to see SMEs involved in energy, infrastructure, agro- business and green growth among others.
African Guarantee Fund risk manager Joshua Obengele said that they are planning to reach at least 50,000 SMEs in Kenya through the provision of partial loans over the next five years.
“Strengthening Africa’s SMEs is critical for development as it is through this that African countries can become more competitive at a global level. With this increased capacity, we will be able to support more SMEs in Kenya and Africa as a whole,” Mr Obengele said.
He added that the fund will spur growth among SMEs by availing working capital faster to enable them finance new projects.
The African Guarantee Fund has been assisting financial institutions in Africa to scale SMEs financing through provision of partial loan guarantees and capacity development assistance.
AGF chief executive officer Felix Bikpo said the new injection will enable them continue with their mandate of mobilizing resources needed to support small and medium sized enterprises.
“If you want really to produce the funding gap that exists in the continent to finance see business and reduce poverty, we need to raise around $ 500 million to do this. And this ceremony is the first step of this exercise,” Mr Bikpo said.
Story by Sherlyne Anyango and Denis Otieno
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