Restricted entry to capital stays a excessive barrier to development for a lot of small- and medium-sized enterprises (SMEs) working in West Africa, a problem compounded by the COVID-19 pandemic. In its continued efforts to assist high-potential SMEs within the area throughout this disaster and the businesses that finance them, the USAID-funded West Africa Commerce & Funding Hub awarded a $2.5 million co-investment grant to the African Assure Fund for Small and Medium-sized Enterprises (AGF).
AGF, a number one non-bank monetary establishment, will leverage this grant, in addition to $20 million of personal fairness, to assist its two-part COVID-19 Assure Facility. The mixed $22.5 million co-investment will enable AGF to soak up further pandemic-related danger and supply ensures to its associate monetary establishments (PFIs) on extra favorable phrases and circumstances whereas remaining financially sustainable.
By means of the COVID-19 Assure Facility, African Assure Fund expects to challenge mortgage ensures to 30 associate monetary establishments (PFIs), permitting them to unlock as much as $160 million in financing for about 3,000 West Africa-based SMEs impacted by the pandemic. As well as, it’ll present technical help to the PFIs and SMEs benefiting from the COVID-19 Assure Facility to speed up their post-pandemic restoration.
Throughout AGF’s three-year partnership with the Commerce Hub, the COVID-19 Assure Facility is anticipated to assist SMEs create 15,000 new jobs, preserve 20,000 current jobs, and collectively generate $100 million in gross sales and $8 million in exports.
“Regardless of the internationally acknowledged significance of SMEs, African small companies typically have difficulties accessing financing for development and innovation from the formal monetary sector. Over the previous two years, SME financing challenges have additional escalated on account of financial uncertainties led to by the impression of the pandemic,” mentioned Jules Ngankam, AGF’s Group Chief Govt Officer.
“Our COVID-19 Assure Facility is a response to this problem, and we’re excited to associate with the Commerce Hub to extend our capability in bridging the SME financing hole by this revolutionary initiative,” he added.
The Commerce Hub’s partnerships with AGF characterize its forward-thinking method to serving to high-potential West Africa-based companies with the financing wanted to rebound from the COVID-19 pandemic.
“Comparable partnerships with Cordaid Funding Administration and CrossBoundary, launched in 2021, are already displaying success in bringing collectively the companions, capital, and assets that create a extra steady surroundings for SMEs to develop and make a optimistic impression within the area,” says Robin Wheeler, the Commerce Hub’s Chief of Get together. “We’re excited so as to add AGF as a co-investment associate,” he added.
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