African Guarantee Fund (AGF) has provided Sh8.24 billion ($80 million) to six Kenyan financiers in the past five years to secure small and medium-sized enterprises (SMEs) lending.
Pan-African non-bank financial institution African Guarantee Fund (AGF) has provided Sh8.24 billion ($80 million) to six Kenyan financiers in the past five years to secure small and medium-sized enterprises (SMEs) lending.
It did not reveal the names of the banks citing default risk.
AGF has been assisting financial institutions in Africa to scale up SME financing through provision of partial loan guarantees and capacity development assistance.
“Normally we don’t disclose names of these financial institutions because of the nature of our product. We are insuring the SME loan that the financial institution is extending to the SME. We don’t want the SME to know that their loan is guaranteed and we don’t want to disclose the amount of guarantee we are providing to these financial institutions,” said Jules Ngankan, deputy chief executive and chief financial officer AGF.
He said this is designed to manage the risks. AGF has received an Insurance Financial Strength (IFS) rating of AA- (very strong) from global rating agency Fitch Ratings.
“Since the official launch of AGF in 2012, we have provided $80 million of guarantee fund to six Kenyan financial institutions. We plan to triple this amount in the next two years,” said Mr Ngankan.