UBA partners AGF in $100m project to grow SMEs in Africa

Cynthia Ezekwe

In a move that promises to have a major impact on the African business landscape, the African Guarantee Fund (AGF) and United Bank for Africa (UBA) have joined forces to provide up to $100 million in loans to small and medium-sized enterprises (SMEs) and business owners across 20 African countries. 

The support provided by AGF to UBA customers will be wide-ranging, with a $50 million portfolio guarantee ensuring that SMEs can access the capital they need to grow and thrive. In addition, AGF will offer capacity development training programmes to help UBA customers gain the skills and knowledge they need to succeed. Notably, AGF will prioritise supporting women-led businesses and green finance projects, in line with its commitment to promote sustainable and inclusive economic growth across Africa. 

Oliver Alawuba,The UBA Group managing director, reaffirmed the bank’s dedication to supporting SMEs and boosting inclusive economic growth in Africa, particularly in women-owned businesses. 

Alawuba highlighted how the $50 million guarantee will serve as a powerful tool for supporting UBA’s SME customers, as well as women-led and environmentally-friendly businesses, expanding the bank’s reach and impact in Africa. In addition, the capacity development initiatives that AGF will offer UBA’s customers will be an important factor in helping businesses to grow and succeed. 

“I’m 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, the GMD added. 

Alawuba noted that UBA 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 $42bn. 

Jules Ngankam, Group CEO of the African Guarantee Fund, asserted that the partnership between two pan-African institutions that are both at the forefront of catalyzing growth and development of SMEs would significantly drive economic growth across the continent.

According to Ngankam, Small and medium-sized enterprises, despite being the backbone of all African economies, accounting for 90 per cent of the private sector and 60 per cent of all jobs, are perceived as risky and therefore have limited access to financing.

“Through this guarantee facility and the technical capacity development grant support, we will de-risk SMEs with a priority on those that are owned or led by women and those that are within the green sector,” he added.