The African Guarantee Fund (AGF), a pan-African financial institution created to help small and medium-sized
companies, announced on Monday the establishment of a fund to finance African SMEs in difficulty in
due to the coronavirus pandemic.
“AGF’s COVID-19 facility amounts to $1.2 billion in guarantees, which will allow banks
to finance SMEs up to 2.4 billion dollars at least for a period of two years", underlines
a statement.
AGF estimates "between 20 and 40 billion dollars", the loss of turnover for SMEs in Africa in
2020 due to the pandemic.
“The consequences of the COVID-19 pandemic will continue to have growing negative effects on
SMEs in Africa, both on the credit supply side and on the demand side," said Félix Bikpo,
CEO of AGF. “Therefore, we anticipate a deterioration in the solvency of SMEs.
This factor is likely to induce an increase in the cost of credit for the financial sector, which
will certainly increase its reluctance to finance SMEs in the absence of external stimuli".
AGF is a non-banking financial institution whose objective is to promote the development
economy, increase job creation and reduce poverty in Africa by providing
financial institutions with guarantee solutions, specifically aimed at supporting SMEs in Africa.
The development institutions of Denmark (DANIDA), Spain (AECID), France (AFD),
Germany (KFW), the African Development Bank (ADB) are the main donors.