Pan-African fund AGF secures Sh2.9bn to finance small firms

  • Written by  BRIAN NGUGI

The African Guarantee Fund for small and medium-sized enterprises (AGF), has received a capital injection of EUR 25 million (about Sh2.9 billion) from the German government-owned KfW Entwicklungsbank (KfW Development Bank).

The Nairobi-headquartered pan-African fund said it will ramp up its financing activities among local lenders with a focus on SMEs following the fresh capital boost.

“Through the increased capital, AGF has acquired more capacity to address the financing barrier which remains a key challenge for African SMEs,” AGF chief executive officer Felix Bikpo said in a statement.

“AGF will now be able to channel more guarantees and technical assistance to financial institutions thereby generating enhanced growth in the African SME sector.” SMEs in the country have been hard hit following the September 2016 ceilings on loan charges at four percentage points above the Central Bank Rate, now at nine per cent.

Private sector credit grew by 4.4 percent growth in the 12 months to October compared to September 3.9 percent.

The credit growth remained well below the central bank’s target rate of 12-15 percent, a growth adequate to support economic development.

“Our investment into AGF forms part of KfW’s strategy to promote private investment and financial markets in Africa,” said KfW director for regional funds Thomas Duve.

African Guarantee Fund launched six years ago says it has led the guarantee market in Africa by issuing guarantee products to more than 100 financial institutions that have in turn made available $1.6 billion of financing for SMEs across 39 countries in Africa.

Kenya introduced interest rate controls in September 2016 with the enactment of a law that limits lending rates to not more than four percentage points above the Central Bank Rate in response to the high cost of credit that saw banks lend to private businesses and individuals at more than 20 percent.

Login to post comments
back to top

BEAMED BC-TV

Latest on Economy

Economy

Mozambique to host 12th U.S.-Africa Busi…

14 March, 2019 | Hits:50

Johannesburg, South Africa (ADV) – Mozambique is s...

Economy

Aliko Dangote named richest person in Af…

05 March, 2019 | Hits:55

Aliko Dangote, the Nigerian businessman and Presid...

Economy

Expert: Small fragmented African airline…

28 February, 2019 | Hits:312

Like it has been the case in previous years, the g...

Economy

SKA infrastructure design complete

28 February, 2019 | Hits:303

South African Science and Technology Minister Mmam...

Economy

Kenyan and Chinese firms secure geotherm…

28 February, 2019 | Hits:296

Ethiopian Electric Power (EEP) has signed a deal w...

Economy

South Africa stimulus package to create …

28 February, 2019 | Hits:312

Transport Minister Blade Nzimande has announced a ...

Economy

eSwatini is facing an unprecedented econ…

28 February, 2019 | Hits:371

eSwatini’s economy probably contracted in 2018 and...

Economy

80% of women in low- and middle-income c…

27 February, 2019 | Hits:272

80 per cent of women in low- and middle-income cou...

Economy

South Africa - India trade relations dee…

27 February, 2019 | Hits:276

Two KwaZulu-Natal companies are on a mission to ex...

Economy

Closing Africa’s financing gap

27 February, 2019 | Hits:290

Toward the end of 2018, the United States merged e...

Economy

First China-Africa economic, trade expo …

27 February, 2019 | Hits:280

At least 1,000 African guests and traders will att...

Economy

Ethiopia moves to boost ease of doing bu…

27 February, 2019 | Hits:290

Ethiopia continues to work towards improving ease ...

Economy

US $7bn to be injected into infrastructu…

27 February, 2019 | Hits:277

South Africa is set to commit US $7bn over the nex...

Economy

Mozambique, Soliridad Southern Africa in…

26 February, 2019 | Hits:324

The National Institute for Standardization and Qua...

Economy

Mozambique, Soliridad Southern Africa in…

26 February, 2019 | Hits:320

The National Institute for Standardization and Qua...

Economy

Ethiopian Airlines to operate all-female…

26 February, 2019 | Hits:282

Ethiopian Airlines has announced that it has final...

Economy

Africa: The first African Digital Rail S…

26 February, 2019 | Hits:265

Cape Town, South Africa, 25 February 2019 - "Afric...

Economy

Tech startups in Sub-Saharan Africa to g…

26 February, 2019 | Hits:283

Tech startups from Sub-Saharan Africa markets to g...

Economy

IFC invests $15 million in Comoros telec…

25 February, 2019 | Hits:316

International Finance Corporation has made its fir...

Economy

MafAfrique to invest $7 Million in Tanza…

25 February, 2019 | Hits:270

Advisory and fund management group, MafAfrique, ha...

By Category

Local News

User Menu

About Us

Follow Us