The African Guarantee Fund (AGF) and Nigeria’s Bank of Industry (BOI) have signed a $50million Loan Portfolio Guarantee framework in a bid to provide financial and business support services to enterprises in the country.
The agreement that was signed at the Africa Investment Forum in Rabat is backed by African Development Bank’s Affirmative Finance Action for Women in Africa (AFAWA) initiative.
The transaction, which will be phased out in three tranches over a 10-year period, will significantly scale up BOI’s lending to Micro, Small and Medium Enterprises (MSMEs) in Nigeria.
The partnership includes a comprehensive risk sharing mechanism that focuses on supporting MSMEs, Women-Owned enterprises and Green businesses to promote environmental sustainability and gender equity.
Speaking during the signing ceremony, AGF group chief executive officer, Jules Ngankam said, the transaction with the Development Finance Institution(DFI), is a great milestone that will significantly impact Nigeria’s economy by unlocking up to $100 million in financing for SMEs as AGF is also expected to provide tailored guarantees and technical assistance towards the special SME products offered by BOI, targeting Women, Youth and Green Businesses.
On his part, the MD/CEO of the Bank of Industry(BoI), Dr. Olasupo Olusi, said: “BOI is excited to leverage the guarantee framework of the African Guarantee Fund in promoting sustainable growth, gender equity, innovation and advancing more credit to SMEs in Nigeria in line with President Bola Tinubu’s government’s agenda.”
Similarly, vice president for Agriculture, Human and Social Development, Dr. Beth Dunford said, this strategic partnership illustrates the commitment of the African Development Bank, especially, the Affirmative Finance Action for Women in Africa (AFAWA) initiative, to empower women entrepreneurs and foster economic growth in Nigeria.
It is not just a financial transaction aimed at supporting and catalysing the growth of small and medium enterprises in Nigeria; it is a beacon of hope and progress for African businesses, particularly for those led and owned by women, Dunford pointed out.
This agreement signifies the start of a long-term strategic relationship, and it provides a perfect intersection of the AGF’s mission to unlock financing for SMEs, and BOI’s mandate to catalyse Nigeria’s industrialisation and economic transformation.
African Guarantee Fund is a specialised guarantee provider whose mission is to facilitate economic development and poverty reduction in Africa. To achieve this, AGF increases access to finance for Small and Medium-sized Enterprises (SMEs) across key economic sectors through an array of guarantee products and capacity development assistance.
The Bank of Industry Limited (BOI) is Nigeria’s oldest, largest and most successful development financing institution (DFI).It was incorporated in 1959 as the Investment Company of Nigeria (ICON) Limited and reconstructed into Nigerian Industrial Development Bank (NIDB) in 1964 under the guidance of the World Bank.
The Affirmative Finance Action for Women in Africa (AFAWA) is an African Development Bank’s initiative contributing to bridge the $49 billion access to finance gap for women in Africa.
