Nairobi — Commercial Bank of Africa has announced the signing of a Sh200 million portfolio guarantee arrangement with Africa Guarantee Fund (AGF).
Speaking at a press briefing at the CBA headquarters on Thursday, CBA Kenya chief executive officer Jeremy Ngunze said that the agreement targets the Small and Medium Enterprises sector to give them capacity to grow and add value to the development of the country.
"We at CBA are aware of the struggles that many entrepreneurs face in terms of raising capital for their businesses. It is this inadequate access to finance that CBA is happy to be associated with AGF, as it will assist businesses get innovative credit solutions and thereby support their growth," he pointed out.
Ngunze said that the agreement will improve and expand financial product offerings to numerous Small and Medium Enterprises and greatly enhance the sector engagement strategies through their products.
Ngunze revealed that CBA will also work with AGF in capacity building through training, credit scoring modules and research in bid to support this crucial sector in the economy.
"AGF not only provides support towards banks facilitating credit to the SME sector. They also work with financial institutions in the area of capacity building which we are looking forward to," he explained
Ngunze affirmed that it is through the provision of financial guarantees for SME'S that will contribute to economic development and poverty reduction in Africa.
This agreement comes a day after I&M Bank Limited and AGF signed a Portfolio Guarantee Agreement through which AGF will support the bank's lending to Small and Medium-sized Enterprises (SMEs) in Kenya.
AGF is a financial scheme aimed at financially supporting African Small SMEs through partial credit guarantees based on product portfolio and capacity development
The AGF CEO Felix Bikpo said that they are pleased to partner with CBA as it innovates and diversifies its SME banking services.
"It is such initiatives that will contribute to economic growth, new job opportunities, capital markets development government revenue and foreign exchange," he stressed.
AGF who Launched in June 1012 (an initiative by Denmark, African Development Bank and Spain), is currently focussing its activities in Cameroon, Ghana, Zambia, Mali, Mozambique, Senegal, Tanzania, Uganda and Kenya aiming at covering the whole of Africa.