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VENTURES AFRICA – African Guarantee Fund (AGF) has entered into an agreement with Diamond Bank to support the lender’s microcredit to small businesses in the region to the tune of $25 Million.
One of the major constraints faced by small businesses is the restricted access to credit. MSMEs cannot access finance due to unavailable or inadequate collateral security, lack of financial or other records and are therefore perceived as highly risky by banks.
According to the Chief Executive Officer, African Guarantee Fund, Mr. Felix Bikpo, “In Africa, majority of the economic growth is trade driven. Once trade is backed out, we have little or nothing. What we are doing in the AGF is to partner with like-minded institutions to provide adequate support for MSMEs to function actively in the sector. We are glad to partner with Diamond Bank as we have found their MSME support strategy to be the right one.”
Under the terms of the $25 Million agreement in which AGF would be insuring 50 percent of the funds, Diamond Bank affiliates in Togo, Benin, Senegal, Côte d’Ivoire and Nigeria will work together with AGF to increase lending to MSMEs to unlock the potentials within them in the region.
Diamond Bank is the leading supporter of small businesses in Nigeria, granting well over N120 billion in loans to more than 120,000 MSMEs in Nigeria since 2009.
Launched in 2012, the African Guarantee Fund is a joint venture between the African Development Bank, the Danish and Spanish Governments.
The AGF is a permanent regional conduit for channeling guarantees and technical assistance to financial institutions in Africa with the objective of generating enhanced growth in the MSME sector, thereby creating increased employment opportunities in African economies.