FSDH, African Guarantee Fund sign N3.8bn agreement to boost credit

African Guarantee Fund (AGF) through its subsidiary AGF West Africa has signed an agreement with FSDH Merchant Bank to the tune of N3.8billion to scale up the bank’s SME business portfolio for an initial 5-year period. 

Businesses play a major role in most economies, particularly in developing countries. The survival and growth of small-scale businesses is an important contributor to job creation and economic development in emerging markets like Nigeria. However, access to finance is a key constraint to business growth, it is particularly difficult for SMEs and women-led businesses to access funding without difficulties in Nigeria. The partnership between African Guarantee Fund and FSDH Merchant Bank aims to reduce this gap.

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In her statement, the Managing Director of FSDH Merchant Bank, Bukola Smith, acknowledged the impact of the scheme.

“At FSDH, we are promoting 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 said.   

She further stated 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 N3.8 billion 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 added.

The Managing Director, African Guarantee Fund West Africa, Bendjin Kpeglo affirmed that the partnership will 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.