Melvin Onwubuke
The African Guarantee Fund and United Bank for Africa have signed a partnership that will benefit Small and Medium Enterprises across 20 African countries.
According to a statement from UBA on Monday, under this agreement, the AGF will support and guarantee $50 million portfolio guarantees for bank clients that run SMEs across Africa while facilitating an extensive development of their capacity in order to give greater attention to women-led enterprises and green finance projects.
UBA Group Managing Director, Oliver Alawuba, while speaking at the signing ceremony of a partnership agreement with Bank’s Head Office in Lagos said that as Africa’s largest bank, it will continue to support small and medium-sized enterprises particularly women operating businesses on African soil.
He said, “This guarantee will serve as a catalyst for the bank’s intervention for SME business, women-led 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’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.”
He pointed out that the bank’s collaboration with the Affirmative Financial Action for Women Protocol reflects its commitment to promoting equality between women and men.
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 $42bn,” Alawuba explained.
Meanwhile, the Group CEO of the African Guarantee Fund, Jules Ngankam, asserted that the partnership between two pan-African institutions that are both at the forefront of catalysing growth and development of SMEs would significantly drive economic growth across the continent.
In addition, the Group Executive Director of Africa’s Guarantee Fund, Jules Ngankam, said that the partnership between two pan African institutions at the forefront of catalysing growth and development of SMEs will have a significant impact on economic growth in all parts of Africa.
He said “Small and medium enterprises despite being the backbone of all African economies – they account for 90 percent of the private sector and 60 percent 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.”
This collaboration follows an announcement made by UBA and the Africa Continental Free Trade Area Secretariat in September 2024. The partnership will enable the bank fulfill its $6bn commitment to SMEs across Africa under the AfCFTA initiative.
