Ecobank Signs Portfolio Guarantee Agreement to Support SME Businesses with the African Guarantee Fund (AGF)
Lagos, September 24, 2013: Today saw the official signing ceremony for a co-operation agreement between Ecobank Transnational Incorporated (“Ecobank”), the leading pan-African banking group, and the African Guarantee Fund (“AGF”) to promote and support small business across Sub-Saharan Africa.
Under the terms of this USD 50 million agreement, the two institutions will work together to unlock the potential of small and medium-sized enterprises (“SMEs”) in Benin, Burkina Faso, Cameroon, Côte d’Ivoire, the DRC, Kenya and Nigeria to deliver inclusive growth.
The inaccessibility of finance is a major obstacle to small business growth and development, with only 20% of African SMEs receiving a credit line from a financial institution. This agreement aims to assist viable SMEs by providing an AGF-backed partial guarantee for 50% of net losses of principal under the loan facilities extended to customers in the value chain of SME financing programs, including Contract & Receivables Finance, Distributorship Finance and Asset Finance.
Commenting on this transaction, Ecobank Group Chief Executive Officer, Thierry Tanoh said: “This agreement reaffirms Ecobank‟s commitment to support small and medium-sized businesses and our collaboration with Africa Guarantee Fund will further enable the SME sector play a critical role in the socio-economic development of Africa.”
Also commenting at the signing ceremony, the Group Executive Director, Domestic Bank, Patrick Akinwuntan said, “Ecobank recognizes that the SME and Medium sized enterprises sector has significant growth potential, represents Africa‟s „rising middle‟ and provides the largest employment pool for our vibrant population. This agreement leverages our unrivalled pan-African footprint to deepen financial inclusion in Africa.”
Executive Director, Domestic Bank, Patrick Akinwuntan
Also speaking, M. Felix Bikpo, the Chief Executive Officer of AGF added: “The partnership with Ecobank is of great significance as it provides the Africa Guarantee Fund with a very important Pan-African Banking network through which African Small and Medium Sized Enterprises (SMEs) will be assisted in getting increased access to financing. This Partnership is another manifestation of AGF‟s role as the missing link to increasing the financing of African SMEs by banks and non-bank financial institutions”.