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By investing in the African Guarantee Fund (AGF) and supporting the AFAWA initiative, AFD Group is reaffirming its support for MSMEs, especially those run by women.
Client presentation

African Guarantee Fund (AGF) is a guarantee fund set up in 2012. It offers African financial institutions solutions for guarantees for SME loans, in the form of portfolio guarantees, individual guarantees and guarantees on bond issues. AGF also sets up technical assistance programs for its partner banks and the SMEs that benefit from guarantees. The fund has seen strong growth since 2012 and today operates in 40 African countries (mainly in East Africa and West Africa). It works with over 150 financial institutions with USD 900m of guarantees signed since its inception, for 20,500 SMEs, including 6,000 owned by women.

Project description

Proparco’s USD 10m investment in AGF will contribute to the growth of this pan-African fund and support the AFAWA (Affirmative Finance Action for Women in Africa) initiative launched to increase access to financing for women entrepreneurs. 
AFAWA is a joint initiative of the African Development Bank and AGF, launched in 2016 and supported by France and the G7 Member States. It aims to close the financing gap affecting women in Africa with three components. 
A financing component, by increasing the volume of loans allocated to them, a technical assistance component, by building the capacities of women entrepreneurs and providing advisory services to the financial institutions that serve them, and, finally, a business environment component via a dialogue with stakeholders to remove the barriers to their success.

Project impact

The project will contribute to the economic development of countries by financing over 14,000 SMEs through the loan guarantees provided by AGF.
Over the next 5 years, AGF’s operation will benefit some 390 banking partners in Sub-Saharan Africa. It will also facilitate substantial growth in the volume of loans by some USD 2bn for women entrepreneurs and, more generally, MSMEs eligible for the 2X Challenge.
AGF’s support for the AFAWA initiative will maintain some 123,000 indirect jobs in the MSMEs which may be financed through the guarantees. AGF estimates that jobs for women account for about 50% of employment in the SMEs financed by partner banks. The fund also expects a net creation of some 60,000 local indirect jobs over the next 5 years, for the AFAWA segment alone. 
Through these various expected impacts on development, the project will contribute to SDG 8 (Decent work and economic growth) and SDG 5 (Gender equality). 

Date of signature of the project
Multi-country Global Kenya
Financing tool
9 042 408 Euros
Amount of funding
USD 10m Equity investment
Financing details
African Guarantee Fund

This information is given at the time of signature, without prejudice to any developments in the operation/project