In a significant step toward economic empowerment, Equity Group Holdings and the African Guarantee Fund (AGF) have jointly launched a robust USD 500 million financing framework to accelerate access to funding for Micro, Small, and Medium Enterprises (MSMEs) across Africa. This new partnership aims to tackle long-standing barriers that have hindered MSMEs, especially in the wake of financial uncertainties in the region.
The framework, announced during a high-level summit in Nairobi, Kenya, is set to provide credit guarantees and technical support for MSMEs, focusing on youth- and women-led enterprises. This initiative leverages AGF’s strong de-risking instruments and Equity Group’s expansive banking infrastructure to support over 5 million businesses within the next five years.
Framework to Fortify Financial Inclusion
The $500 million agreement represents a bold move to enhance the financial inclusion landscape, beginning with seven key African markets—Kenya, Uganda, Rwanda, Tanzania, South Sudan, DRC, and Ethiopia. The framework will unlock new credit lines for MSMEs, which often face challenges in securing affordable financing due to perceived risks and lack of collateral.
Equity Group CEO James Mwangi emphasized the transformative potential of this collaboration: “MSMEs are the backbone of our economy, and this framework will empower them to scale, innovate, and compete globally.” His sentiments were echoed by AGF Group CEO Jules Ngankam, who highlighted the role of guarantees in mobilizing private sector capital and driving inclusive growth.
The AGF will provide partial credit guarantees to reduce the risks faced by lenders, thereby incentivizing financial institutions to increase their lending to small enterprises. This will especially benefit businesses in rural and underserved regions, where access to credit remains critically low.
Youth, Women, and Green Enterprises Prioritized
A key aspect of the agreement is its commitment to promoting gender equality and sustainable development. At least 30% of the funding will be directed toward women-led businesses, with a similar focus on green enterprises that support climate resilience and environmental protection.
Moreover, the partners plan to invest in financial literacy programs, capacity-building workshops, and digital tools to ensure that beneficiaries are well-equipped to utilize the funds effectively. This holistic approach aims not just to provide money, but to foster a new generation of resilient and sustainable MSMEs across the continent.
With this landmark partnership, Equity Group and AGF are not only enhancing access to capital but are also paving the way for a more inclusive and thriving African economy. As the framework rolls out, it is expected to create jobs, stimulate innovation, and build stronger local economies driven by empowered entrepreneurs.