Pan-African fund AGF secures Sh2.9bn to finance small firms

The African Guarantee Fund for small and medium-sized enterprises (AGF), has received a capital injection of EUR 25 million (about Sh2.9 billion) from the German government-owned KfW Entwicklungsbank (KfW Development Bank). The Nairobi-headquartered pan-African fund said it will ramp up its financing activities among local lenders with a focus on SMEs following the fresh capital boost. “Through the increased capital, AGF has acquired more capacity to address the financing barrier which remains a key challenge for African SMEs,” AGF chief executive officer Felix Bikpo said in a statement. “AGF will now be able to channel more guarantees and technical assistance to financial institutions thereby generating enhanced growth in the African SME sector.” SMEs in the country have been hard hit following the September 2016 ceilings on loan charges at four percentage points above the Central Bank Rate, now at nine per cent.