In a move poised to redefine small and medium enterprise (SME) financing across Africa, the United Bank for Africa (UBA) and the African Guarantee Fund (AGF) have inked a transformative partnership. This collaboration pledges to inject $100 million in new loans into SMEs and business owners spread across 20 African nations where UBA boasts a formidable presence.
At the heart of this partnership lies a $50 million Portfolio Guarantee from the AGF, specifically designed to underwrite SME ventures, with an added emphasis on nurturing women-led businesses and projects centered around green finance. This strategic alliance not only signals a significant boost in financial accessibility for small businesses but also earmarks comprehensive capacity development programs tailored for UBA’s vast clientele. These initiatives are particularly geared towards empowering female entrepreneurs and fostering sustainable business practices across the continent.
Oliver Alawuba, UBA’s Group Managing Director, voiced his enthusiasm during the partnership’s formal unveiling at UBA’s Lagos headquarters. Alawuba highlighted UBA’s unwavering commitment to bolstering SMEs, especially those spearheaded by women, leveraging its extensive network spanning 20 African countries and beyond. “This guarantee will act as a catalyst for SMEs, including women-led and eco-friendly businesses, enabling us to amplify our reach and impact significantly,” Alawuba stated. He also underscored the alignment of these initiatives with UBA’s vision to empower businesses, spur innovation, and champion sustainable growth.
Alawuba further elaborated on UBA’s dedication to advancing the African Continental Free Trade Area (AfCFTA) initiative, reflecting on UBA’s staggering $6 billion commitment to African SMEs. This pledge underscores the bank’s resolve to support the economic integration of the continent and its quest to bridge the financing gap women entrepreneurs face in Africa, estimated at a staggering $42 billion.
The partnership envisages rolling out capacity development platforms either free of charge or at substantially subsidized rates, alongside advocating for governmental policies across Africa that favor women entrepreneurs. It also aims to expand UBA’s green finance initiatives across the continent.
Jules Ngankam, Group CEO of the African Guarantee Fund, praised the alliance between the two pan-African powerhouses, both of which are at the forefront of stimulating SME growth and economic development across the continent. “SMEs are the backbone of African economies, representing 90% of the private sector and accounting for 60% of all jobs. However, they face significant financing hurdles due to perceived risks. Through this guarantee facility and capacity development support, we aim to mitigate these risks, with a particular focus on women-led and green sector SMEs,” Ngankam explained.
This collaboration builds on the momentum of a previous announcement by UBA and the AfCFTA Secretariat in September 2024, propelling UBA’s ambitious $6 billion commitment to fuel SME growth across Africa under the AfCFTA umbrella.
UBA stands as one of the most prominent employers in Africa’s financial sector, with a workforce of 25,000 and serving over 35 million customers worldwide. Its operations extend across 20 African countries and international financial hubs including the United Kingdom, the United States, France, and the United Arab Emirates. UBA is renowned for its comprehensive banking services, spearheading financial inclusion, and embracing advanced technology.
The African Guarantee Fund is a specialized entity focused on facilitating economic growth and poverty alleviation in Africa by enhancing SMEs’ access to finance. Backed by a host of international donors and development agencies, AGF has successfully unlocked over USD 3.5 billion in SME financing, partnering with 200 financial institutions across 40 African countries. AGF’s mission is complemented by its impressive AA- rating from Fitch Ratings, reflecting its robust financial health and commitment to empowering African enterprises.
AFAWA, an initiative by the African Development Bank Group, targets the eradication of the financing disparity women entrepreneurs face, aiming to unlock $5 billion for women-owned and led SMEs by 2026. Supported by global partners, AFAWA has facilitated $1.5 billion in investments for women entrepreneurs across 32 countries through 96 financial institutions, making significant strides toward achieving financial inclusion and empowerment for African women in business.
Source: Leadership
