The United Bank for Africa (UBA) has signed a partnership agreement with the African Guarantee Fund (AGF) to inject $150 million in new loans and guarantees to support small and medium enterprises (SMEs) and business owners across 20 African countries.
Under the agreement, the AGF would support and guarantee SMEs with $50 million portfolio guarantee as well as facilitate extensive capacity development for the bank’s teeming customers who run smallbusinesses across the continent, paying special attention to women-led businesses and green finance projects.
Africa’s global bank
Speaking at the signing ceremony at the UBA Head Office in Lagos, last Monday, the Group Managing Director of UBA, Oliver Alawuba, said that as Africa’s global bank, UBA remains committed towards supporting SMEs in Africa, especially to women founded and managed businesses, given its robust network, which is spread across 20 countries in Africa and major global financial capitals.
“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,” he said.
Additionally, he said the extensive capacity development initiatives planned for its SME customers across 20 African countries align with the bank’s 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 said.
The Group MD noted that the bank was commitment to promoting gender equality in its business which was reflected in collaboration with the Affirmative Finance Action for Women(AFAWA) protocol.
Towards that, he said the bank would provide loans to women owned SMEs at more concessional rates with customer friendly collateral terms, aiming to bridge the sinificant financing gap faced by women in Africa, amounting to $42 billion.
In the same vein, he said capacity development platforms were 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 were more women friendly.
It will also expand the bank’s green finance propositions across Africa.
Pan African institutions
The Group CEO of African Guarantee Fund, Jules Ngankam, said the partnership between the two pan-African institutions that were both at the forefront of catalysing 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, account 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 said.
The announcement
This partnership is sequel to the announcement made by United Bank for Africa (UBA) Plc, and Africa Continental Free Trade Area (AfCFTA) Secretariat in September 2023 which will help the bank drive its $6 billion commitment to SMEs across Africa under the Africa Continental Free Trade Area (AfCFTA).
Source: graphiconline
