The African Guarantee Fund for Small and Medium sized Enterprises (AGF) has signed a protocol agreement worth USD 100 million with the GICAM and a consortium of banks (SGBC, BICEC, Afriland First Bank, Ecobank, BGFI) to set up a pilot project for financing and supporting Small and Medium sized Enterprises (SMEs) in Cameroon.
According to a news release from AGF, the inaccessibility of finance is a major obstacle to small business growth and development, with only 20% of African SMEs receiving a credit line from a financial institution. “The facilities received under this project will allow Cameroonian SMEs to position themselves competitively on the market of the Central African region and Nigeria,” the release notes.
GICAM’s President, Andre Fotso, is quoted as saying, “This one-of-a-kind agreement reaffirms GICAM's commitment to support small and medium-sized businesses and will further enable the SME sector play a critical role in the socio-economic development of Cameroon.”
The Chief Executive Officer of AGF added, “This agreement is of great significance as it provides a platform through which Cameroonian SMEs will be assisted not only in getting increased access to financing, but also capacity development support to enhance their managerial capabilities. This partnership is another manifestation of AGF’s role as the missing link to increasing the financing of African SMEs by banks and non-bank financial institutions”.
AGF is a Pan-African non-bank financial institution owned by the African Development Bank (AfDB), Danish International Development Agency (Danida) and Spanish Agency for International Development Cooperation (aecid). AGF was officially launched on 1st June 2012.
AGF’s primary mandate is to assist financial institutions (banks, private equity funds, lease finance houses and development finance institutions) in Africa to scale up their SME financing through the provision of partial loan guarantees and SME financing Capacity Development Assistance.