AFIS Summit: Ecobank Group and African Guarantee Fund seal $200M risk-sharing deal

Banking

Friday, 17 November 2023 16:44

AFIS Summit: Ecobank Group and African Guarantee Fund seal $200M risk-sharing deal

(Togo First) - The African Guarantee Fund (AGF) will provide Lomé-based Ecobank with additional support to better finance African SMEs. The two recently signed a $200 million risk-sharing agreement in Lomé to this end. The deal was sealed this week during the Africa Financial Industry Summit (AFIS).

The new agreement bolsters the partnership between the two pan-African institutions.

"Our strengthened partnership with the African Guarantee Fund marks an important milestone in our commitment to supporting SMEs across Africa with affordable financing. Through this partnership, we are taking bold steps to improve green finance and financing for women-led businesses", declared Jeremy Awori, CEO of Ecobank Group. "In doing so, we aim to eliminate stringent and restrictive collateral requirements, which particularly hinder access to credit for women-led businesses", he added.

The new partnership now covers 27 countries within Ecobank's African network, offering 50% coverage for eligible SMEs across all of these target markets. The AGF guarantee was first issued in 2013; $50 million for seven countries. In 2018, the facility was extended to seven more countries and amounted to $230 million.

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By teaming up, AGF and Ecobank aim to assist African SMEs to access loans more readily. Indeed, key points of the agreement include enhanced guarantee coverage to 75% for the financing of women-led businesses and green projects, a significant increase in Ecobank's lending capacity for SMEs, and the mitigation of credit risks associated with SME lending. This collaboration promotes financial inclusion by directing funds to businesses, including those in underserved areas, contributing to economic growth, job creation, and sustainable development in sub-Saharan Africa.

"This partnership will catalyze nearly a billion dollars in financing for SMEs, which are the real engines of growth in African economies," said Jules Ngankam, Group Managing Director, AGF, at the AFIS Summit.

The countries covered by the partnership are Togo, Benin, Burkina Faso, Burundi, Cameroon, Cape Verde, Central African Republic, Chad, Congo, Côte d'Ivoire, Equatorial Guinea, Gabon, Ghana, Guinea Bissau, Guinea Conakry, Kenya, Mozambique, Nigeria, Rwanda, Senegal, Sierra Leone, South Sudan, Tanzania, Uganda, Zambia, and Zimbabwe.

Ayi Renaud Dossavi

REFORMS OVERVIEW

STARTING A BUSINESS (more info)

At the fifteenth position, worldwide, and first in Africa, under the Starting a Business index of the 2020 Doing Business ranking, Togo sustains its reformative dynamics with more reforms….

ENFORCING CONTRACTS (more info)

Compared to some years ago when it was one of the lowest rankers under the Doing Business’ Enforcing Contracts indicator, Togo, leveraging many efforts to improve its business climate, was able to jump significantly on the index in the recent years... .

CONTRACT EXECUTION (more info)

Creation of special chambers of commerce for small debts • Creation of chambers of commerce at the Court of Appeal • Civil and commercial cases now handled by distinct clerks • Establishment of commercial courts in Lomé and Kara • Lawyers and bailiffs now have access to the FORSETI COMMERCIAL platform • A maximum period of 100 days was fixed to settle a commercial dispute .

TRADING ACROSS BORDERS (more info)

In comparison to previous years,Togo has significantly improved its ranking under the“Trading across borders” indicator by adopting multiple reforms that focus mainly on the digitization and reduction in delays, for import and export procedures related to import and export.

In comparison to previous years, Togo has significantly improved its ranking on the “Trading across borders” index by adopting multiple reforms that focus mainly on the digitalization and reduction in delays, for import and export procedures related to import and export.

CONSTRUCTION PERMIT (more info)

After moving from the 133rd to 127th place under the 2020 Doing Business’ construction permit index, Togo intends to reiterate this feat in the coming edition of the global ranking. To this end, it has introduced this year multiple reforms.

GETTING ELECTRICITY (more info)

Over the past two years, Togo’s ranking under the Doing Business’ Getting electricity and water indicator has increased consistently. Owing this performance to multiple reforms aimed at making it easier for businesses to access power and water, Lomé plans to introduce even more reforms this year to keep up its improvements.

REGISTERING A PROPERTY (more info)

Out of all the 'Doing Business’ indicators, Property Registration is where Togo has improved the most since 2018. Indeed, after spending years in the lowest part of this ranking, the country now seeks to beat Rwanda which is the best performer on this index in Africa. To do so, Lomé has been introducing many reforms, with the latest batch implemented this year.

PUBLIC PROCUREMENT (more info)

From professionalization to digitization, through legislative regulations, Togo’s public procurement framework is constantly being modernized. Several reforms have been implemented to improve the sector much to the benefit of the private sector, which is the focus of the National Development Plan.

PAYING TAXES AND DUTIES (more info)

To improve its business environment, Togo introduced some important reforms related to the payment of tax and duties. From the replacement of some taxes to the cancellation of others through exemptions, the country has only one objective: offer the most attractive tax framework to investors and economic operators. To achieve this, the authorities relied on digitization.