The African Guarantee Fund through its subsidiary AGF West Africa has signed an agreement with FSDH Merchant Bank of N3.8bn to scale up the bank’s SME business portfolio for an initial five-year period.
A statement by the company said access to finance is a major constraint to business growth, as it was especially difficult for SMEs and women-led businesses to access funding without difficulties in Nigeria.
The partnership between African Guarantee Fund and FSDH Merchant Bank aimed to reduce this gap, it said.
The Managing Director, FSDH Merchant Bank, Bukola Smith, the impact of the scheme at FSDH is to “Promote investments in growing sectors of the Nigerian economy like agriculture, healthcare, technology and the female economy.
‘This transaction will open more opportunities for us to support the growth of the economy on a considerable scale and we will keep working with all relevant stakeholders to maintain this momentum.”
She added that the agreement with African Guarantee Fund would support the bank’s commitment to assisting women-owned businesses and SMEs in closing the funding gap.
“The N3.8bn credit line will strengthen our short-term business loans and will be deployed directly to mid-sized companies and through SME aggregators, business incubators, investment acceleration programmes for businesses who are willing to scale and our women in business initiative,” she said.
The statement noted that in November 2022, FSDH Merchant Bank declared a N2bn funding for women led businesses in partnership with Development Bank of Nigeria.
The recent agreement with African Guarantee Fund further strengthened the resolve to contribute to the economic growth of businesses and entry into new markets.
In his remarks, The Managing Director, African Guarantee Fund West Africa, Bendjin Kpeglo, said the partnership woud serve the common interests of both AGF and FSDH Merchant Bank to strengthen, promote, and develop cooperation in creating financial inclusion and support systems for entrepreneurs.
“The facility is centered around transforming the SME sector, while also particularly supporting women-led businesses who access less financing due to structural inequalities and discrimination.