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African Guarantee Fund to support West African SMEs with its $2,500,000 fund

African Guarantee Fund will leverage this grant, as well as $20,000,000 of private equity, to support its two-part COVID-19 Guarantee Facility



Jules Ngankam, chief executive officer, African Guarantee Fund
Jules Ngankam, chief executive officer, African Guarantee Fund

In its continued efforts to support high-potential SMEs in the region and the companies that finance them, the USAID-funded West Africa Trade & Investment Hub has awarded a $2,500,000 co-investment grant to the African Guarantee Fund for Small and Medium-sized Enterprises.

African Guarantee Fund, a leading non-bank financial institution, will leverage this grant, as well as $20,000,000 of private equity, to support its two-part COVID-19 Guarantee Facility.  

The combined $22,500,000 co-investment will allow African Guarantee Fund to absorb additional pandemic-related risk and provide guarantees to its partner financial institutions (PFIs) on more favourable terms and conditions while remaining financially sustainable.

The goal is to solve the limited access to capital which remains a high barrier to growth for many small- and medium-sized enterprises (SMEs) operating in West Africa, a challenge compounded by the COVID-19 pandemic. 

Through the COVID-19 Guarantee Facility, AGF expects to issue loan guarantees to 30 partner financial institutions (PFIs), allowing them to unlock up to $160,000,000 in financing for approximately 3,000 West Africa-based SMEs impacted by the pandemic. 

In addition, it will provide technical assistance to the PFIs and SMEs benefiting from the COVID-19 Guarantee Facility to accelerate their post-pandemic recovery.

During AGF’s three-year partnership with the Trade Hub, the COVID-19 Guarantee Facility is expected to help SMEs create 15,000 new jobs, maintain 20,000 existing jobs, and collectively generate $100,000,000 in sales and $8,000,000 in exports.

Despite the internationally recognized importance of SMEs, African small businesses often have difficulties accessing financing for growth and innovation from the formal financial sector. Over the past two years, SME financing challenges have further escalated due to economic uncertainties brought about by the impact of the pandemic,” said Jules Ngankam, AGF’s Group chief executive officer.  

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Our COVID-19 Guarantee Facility is a response to this challenge, and we are excited to partner with the Trade Hub to increase our capacity in bridging the SME financing gap through this innovative initiative,” he added.

The Trade Hub’s partnerships with AGF represent its forward-thinking approach to helping high-potential West Africa-based businesses with the financing needed to rebound from the COVID-19 pandemic.

Similar partnerships with Cordaid Investment Management and CrossBoundary, launched in 2021, are already showing success in bringing together the partners, capital, and resources that create a more stable environment for SMEs to grow and make a positive impact in the region,” says Robin Wheeler, the Trade Hub’s chief of party. “We are excited to add AGF as a co-investment partner,” he added.


​Joan Aimuengheuwa is a content writer who takes keen interest in the scopes of innovation among African startups. She thrives at meeting targets and expectations. Contact: [email protected]

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