Kenyan SMEs to get a pie of $1.2 Billion Covid-19 fund relief
Photo Caption: Felix-Bikpo-Chief-Executive-Officer-of-AGF
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By Steve Umidha
A section of Small and Micro Enterprises (SMEs) in Kenya are set to receive relief funds from African Guarantee Fund (AGF) to cushion them against the Covid-19.
AGF for Small and Medium-sized Enterprises announced the allocation of $ 1.2 Billion in guarantees, expected to unlock up to $2.4 billion at minimum for banks to finance SMEs across the continent with Kenyan small scale businesses poised to directly benefit from the funding.
The fund’s COVID-19 response is aimed at reducing the uncertainties facing financial institutions in Africa as a result of the global coronavirus pandemic.
“African Guarantee Fund’s response sets the platform for economic stabilization, followed by an economic revival through AGF’s newly developed COVID-19 Guarantee Facility that will, firstly, provide more comfort to financial institutions to restructure facilities that become non-performing because of COVID-19 and, secondly, provide commercial stimulus to the financial sector with the aim of mitigating the deterioration of SMEs’ perceived risk,” said AGF Chief executive Felix Bikpo.
He added that the launch of COVID-19 Guarantee Facility by the lender will aim to increase the capacity of financial institutions in their risk assessment of SMEs during the crisis period.
The allocation according to him, will however follow an SME creditworthiness.
The African Guarantee Fund recently received a third time AA- Rating by Fitch, which was first assigned in November 2017, a first for a guarantee fund in Africa.
Since inception, AGF has boosted SME lending in Africa by issuing guarantees to financial institutions thereby unlocking loans worth USD 2.5 Billion.