UBA, African Guarantee Fund partner to support SMEs across Africa.

The agreement was signed by the two Pan-African institutions Monday March 11, at UBA’s Head Office in Lagos, Nigeria. 

UBA’s Group Managing Director, Oliver Alawuba, signed on behalf of the financial institution while the Group CEO of African Guarantee Fund, Jules Ngankam, penned the deal for his structure. 

The recently signed agreement, ensures that UBA provides $100 million in new loans to SMEs and business owners across the 20 African countries where the bank has presence in the continent.

The AGF, under the agreement, will support and guarantee SMEs with $50 million Portfolio Guarantee as well as facilitate extensive capacity development for the Bank’s teeming customers who run small businesses across the continent, paying special attention to women-led businesses and green finance projects.

Speaking during the partnership signing ceremony, UBA’s Group Managing Director, Oliver Alawuba, said as Africa’s Global Bank, UBA remains committed towards supporting SMEs in Africa, especially to women founded and managed businesses, given its robust network, which is spread across the 20 countries in Africa and major global financial capitals. 

“This guarantee will serve as a catalyst for the bank's intervention for SME business, women-led and environment friendly businesses, enabling us to further extend our reach and impact. Additionally, the extensive capacity development initiatives planned for our SME customers across 20 African countries align with our vision to empower businesses, drive innovation, and foster sustainable growth,” Alawuba said. 

UBA’s Group Managing Director used the opportunity to reaffirm the institution’s commitment to advancing the 

UBA’s Group Managing Director used the opportunity to reaffirm the institution’s $6 billion commitment in advancing the African Continental Free Trade Area, AfCFTA initiative.

“This initiative, announced in September last year, demonstrates our dedication to supporting the economic integration of our continent,” he added. 

“Moreover, our commitment to promoting gender equality in our business is reflected in our collaboration with the Affirmative Finance Action for Women, AFAWA, protocol. Through this we will provide loans to women-owned SMEs at more concessional rates, with customer friendly collateral terms, aiming to bridge the significant financing gap faced by women in Africa, amounting to $42 billion,” Alawuba noted.

In the same vein, capacity development platforms are to be extended for free or at highly discounted rates while the partners will engage with governments across Africa to create and activate business environments that are more women friendly. It will also expand the Bank’s Green Finance propositions across Africa.

Enter AGF Group CEO 

Speaking at the signing ceremony, the Group CEO of African Guarantee Fund, Jules Ngankam, said the partnership between two pan-African institutions who are both at the forefront of catalysing growth and development of SMEs will significantly drive economic growth across the continent.

He said SMEs despite being the backbone of all African economies, accounting for 90% of the private sector and 60% of all jobs, are perceived as risky and therefore have limited access to financing. 

He said through this guarantee facility and the technical capacity development grant support, both institutions will de-risk SMEs with a priority on those that are owned or led by women and those that are within the green sector.

“This partnership is sequel to the announcement made by United Bank for Africa (UBA) Plc, and Africa Continental Free Trade Area (AfCFTA) Secretariat in September 2024 which will help the Bank drive its $6Bn commitment to SMEs across Africa under the AfCFTA initiative,” Ngankam said. 

About UBA Group 

United Bank for Africa, UBA Plc, is a leading Pan-African financial institution, offering banking services to more than thirty-five million customers, across 1,000 business offices and customer touch points in 20 African countries. 

With presence in New York, London, Paris, and Dubai, UBA is connecting people and businesses across Africa through retail, commercial and corporate banking, innovative cross-border payments and remittances, trade finance and ancillary banking services.

About AGF 

The 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. 

Since inception, AGF has unlocked more than USD 3.5 billion in SME financing, through partnerships with 200 partner financial institutions across 40 African countries.  

AGF is backed by the following shareholders and sponsors: The Government of Denmark through the Danish International Development Agency, DANIDA, the Government of Spain through the Spanish Agency for International Cooperation, AECID, the African Development Bank, AfDB, French Development Agency, AFD, Nordic Development Fund, NDF, Investment Fund for Developing Countries, IFU, German Development Bank, KfW, French Agency for Private Sector, PROPARCO, West African Development Bank, BOAD, Global Affairs Canada, GAC, USAID's West Africa Trade & Investment Hub, WATIH, TechnoServe and Norwegian Agency for Development Cooperation, Norad. African Guarantee Fund is rated AA- by Fitch Ratings.