Business
UBA, African Guarantee Fund, Create Synergy to Support SMEs Across Africa
UBA, African Guarantee Fund, Create Synergy to Support SMEs Across Africa
- UBA to Finance Women-Led SMEs, Green Finance with $100m
- AGF Provides a portfolio guarantee of $50 million and technical Support
The African Guarantee Fund (AGF) and United Bank for Africa (UBA) signed a partnership on Monday that ensures that UBA provides $100 million in new loans to small and medium enterprises (SME) and business owners across the 20 African countries where the bank has a presence in Africa.
The AGF under this agreement will support and guarantee SMEs with a $50 million portfolio guarantee as well as facilitate extensive capacity development for the bank’s teeming customers who run small businesses across the continent, paying special attention to women-led businesses and green finance projects.
UBA’s Group Managing Director, Oliver Alawuba, who spoke during the partnership signing ceremony between both institutions at the UBA Head Office 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 robust network, which is spread across the 20 countries in Africa and major global financial capitals.
He said,
- “This guarantee will catalyze the bank’s intervention for SME businesses, women-led businesses, and environment-friendly businesses, enabling us to further extend our reach and impact.
- Additionally, the extensive capacity development initiatives planned for our SME customers across 20 African countries align with our vision to empower businesses, drive innovation, and foster sustainable growth.”
- “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 dedication to supporting the economic integration of our continent,” he further said.
- “Moreover, our commitment to promoting gender equality in our business is reflected in our collaboration with the Affirmative Finance Action for Women (AFAWA) protocol.
- Through this, we will provide loans to women-owned SMEs at more concessional rates with customer-friendly collateral terms, aiming to bridge the significant financing gap faced by women in Africa, amounting to $42 billion,” Alawuba noted.
In the same vein, capacity development platforms are to be extended for free or at highly discounted rates, while the partners will engage with governments across Africa to create and activate business environments that are more women-friendly. It will also expand the bank’s green finance propositions across Africa.
Speaking at the signing ceremony, the Group CEO of the African Guarantee Fund, Jules Ngankam, said the partnership 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.
“Small and medium enterprises, despite being the backbone of all African economies—they account for 90% of the private sector and 60% of all jobs—are perceived as risky and therefore have limited access to financing. We will de-risk SMEs by means of this guarantee facility and the technical capacity development grant support, giving preference to those owned or led by women and those operating in the green sector.
This collaboration is the follow-up to the September 2024 announcement made by the Africa Continental Free Trade Area (AfCFTA) Secretariat and United Bank for Africa (UBA) Plc, which will support the Bank in advancing its $6 billion commitment to SMEs throughout Africa under the AfCFTA initiative.
With 25,000 workers worldwide and more than 35 million clients served, United Bank for Africa is among the biggest employers in the financial industry on the African continent.
Operating in 20 African countries and the United Kingdom, the United States of America, France, and the United Arab Emirates, UBA provides retail, commercial, and institutional banking services, leading financial inclusion and implementing cutting-edge technology.
The African Guarantee Fund (AGF) is a specialized guarantee provider whose mission is to facilitate economic development and poverty reduction in Africa.
To achieve this, AGF increases access to finance for small and medium-sized enterprises (SMEs) across key economic sectors through an array of guarantee products and capacity development assistance.
Since its inception, AGF has unlocked more than USD 3.5 billion in SME financing through partnerships with 200 partner financial institutions across 40 African countries.
The following organizations support and sponsor AGF: Global Affairs Canada (GAC), USAID’s West Africa Trade & Investment Hub (WATIH), TechnoServe, the Norwegian Agency for Development Cooperation (Norad), the African Development Bank (AfDB), the French Development Agency (AFD), the Nordic Development Fund (NDF), the Investment Fund for Developing Countries (IFU), the German Development Bank (KfW), the French Agency for Private Sector (PROPARCO), the West African Development Bank (BOAD), the German Development Bank (KfW), the French Agency for Private Sector (PROPARCO), the West African Development Bank (BOAD), Global Affairs Canada (GAC), the French Agency for Private Sector (PROPARCO), the West African Development Bank (BOAD), Global Affairs Canada (GAC), the United States Agency for Development Cooperation (USAID). 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 comprehensive support.
AFAWA aims to unlock $5 billion in financing for women-owned and women-led small and medium enterprises by 2026.
The Women’s Enterprise Finance Initiative (We-Fi), the G7 nations, the Netherlands, Sweden, and other partners and donors of the African Development Bank provide support to AFAWA.
The African Development Bank, working with 96 financial institutions, has approved a $1,5 billion investment through AFAWA for women entrepreneurs in 32 countries.
