Partnership to provide $12m for African development minerals producers

PROVIDING NEW OPPORTUNITIES The $12-million in credit guarantee facilities will be made available to financial institutions in Cameroon, Guinea, Nigeria, Uganda and Zambia

Photo by Reuters

FELIX BIKPO The development of small and medium-sized enterprises is one of the principal solutions to the growth challenges faced by African countries

6th October 2017

By: Ilan Solomons

Creamer Media Staff Writer


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Five-thousand small and medium-sized enterprise (SME) development mineral producers will have access to more affordable finance as a result of a partnership between the African Guarantee Fund for Small and Medium-sized Enterprises (AGF), the African Caribbean and Pacific Group of States (ACP), the European Union (EU) and the United Nations Development Programme (UNDP).

Development minerals are minerals and materials, including industrial minerals and construction materials, that are mined, processed, manufactured and used domestically in construction, manufacturing and agriculture and which also comprise semi-precious stones.

AGF will make available $12-million in credit guarantee facilities to financial institutions in Cameroon, Guinea, Nigeria, Uganda and Zambia to support loans provided for these SMEs working in the development minerals sector.

The AGF notes that the $12-million will in fact result in up to $24-million in finance, as guarantees underpin 50% of each loan. The financing is expected to boost the livelihoods of about 25 000 people and their dependants across some of Africa’s most impoverished communities.

“SMEs create more than 90% of jobs in developing countries and are already major backers of poverty reduction and development at local level. However, SMEs often tell us that they need more finance to thrive, particularly those in neglected sectors, such as ‘development minerals’. Together with AGF, we are stepping in to fill this gap,” states United Nations and UNDP Brussels director Barbara Pesce-Monteiro.

Further, AGF CEO Felix Bikpo points out that the development of SMEs is one of the principal solutions to the growth challenges faced by African countries. He explains that these businesses are recognised as one of the key drivers of growth and job creation in every modern economy worldwide.

“Unfortunately, African SMEs are not playing this role because of the constraints that they face. Among these constraints, the noted one is the lack of, or inadequate, access to financing,” Bikpo comments.

AGF helps SMEs access finance by sharing potential risk with financial institutions. It also provides training to build their capacity. Since its launch in 2012, AGF has partnered with financial institutions in 38 African countries. More than 4 000 SMEs have benefited from its loan guarantee facilities.

The AGF and the ACP-EU Development Minerals Programme will also invest $200 000 in training financial institutions and SMEs to ensure funds are disbursed and spent effectively. Together, they will run training on credit and risk assessment for credit directors, risk managers and risk analysts in the participating countries.

Simultaneously, the ACP-EU Development Minerals Programme will work with development minerals SMEs to improve their entrepreneurial skills, including accounting, marketing, sales promotion and purchasing.

Edited by Martin Zhuwakinyu
Creamer Media Senior Deputy Editor




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