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KfW Bank to back 10,000 African SMEs with $33 mn credit facility

KfW Development Bank SMEs

The German bank will support the African Guarantee Fund aimed at improving SME financing across the continent

Germany’s KfW Development Bank is taking an initiative to help 10,000 small and medium enterprises (SMEs) in Nigeria with a $33 million credit facility. The German bank’s initiative will back the African Guarantee Fund which aims to provide financial guarantees to African entrepreneurs, a media report said. 

The initiative was announced by African Guarantee Fund’s Group CEO Felix Bikpo.  The bank’s funding is anticipated to empower the group to carry out its mission in SME financing in Africa. 

Bikpo told the media that, “This capital injection will go a long way in ensuring that we continue to make a positive impact on the continent. So far, we have cumulatively issued more than $1 billion worth of guarantees, making available about $1.7 billion for SME financing through our partner financial institutions. This has led to the creation of more than 100, 000 additional jobs.”

African Guarantee Fund’s platform seeks to ease funding access for SMEs across Africa. In the big picture, the funding opportunities will boost African SMEs’ role in developing their economies. 

It appears that 20,000 African SMEs have benefitted from the African Guarantee Fund. Of the SMEs, 60 percent of them are millennials and 30 percent are owned by women, a media report said. Women and millennials are the two demographics that largely contribute to Africa’s developing economy. Also, the capital injected by KfW Development Bank will be used toward financing women-owned SMEs on the continent. 

African Guarantee Fund was co-established by the Danish International Development Agency, the Spanish Agency for International Cooperation and Development and African Development Bank. French Development Agency, Nordic Development Fund, Investment Fund for Developing Countries, KfW Development Bank is the fund’s other shareholders.

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