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Ecobank agrees $200 million risk-sharing deal for SMEs in Africa

Published

1 year ago

November 18, 2023

Ecobank has signed a new $200 million risk-sharing deal with the African Guarantee Fund (AGF) which will allow the disbursement of cheap loans to countries across Africa.

Under the arrangement, small and medium enterprises in Kenya, Uganda, Tanzania, Rwanda, and 23 other African countries will be able to access funds from the bank, which is to date the largest risk-sharing agreement on the continent.

To expand access to financing for SMEs and green businesses across the continent, the guaranteed agreement was signed on Thursday on the fringes of the African Financial Industry Summit (Afis) in Lomé, Togo.

SMEs are more likely than large firms to rely on internal funds or cash from friends and family for the launch and initial running of their enterprises.

AGF, a private sector credit guarantor based in Nairobi, will guarantee up to 75% of loans to women-led and environmentally conscious businesses, and 50% of loans to small and medium-sized enterprises (SMEs) across the continent. This arrangement will increase the accessibility and affordability of credit for these businesses.

The CEO of Ecobank Group, Jeremy Awori, stated that the risk-sharing agreement would promote the creation of jobs, business expansion, innovation, and environmentally friendly solutions for the continent by increasing credit extension to SMEs in 27 of the 35 markets they serve.

“Through this partnership, we are taking bold steps to enhance green financing and gender financing. In doing so, we aim to eliminate the rigorously restrictive requirement for collateral, particularly hindering women-focused businesses’ access to credit,” Mr. Awori said during the signing of the agreement in Lomé on Thursday.

“This partnership will catalyse close to $1 billion of financing for SMEs, who are the real drivers of growth in African economies,” said AGF CEO, Jules Ngankam.

According to the World Bank, SMEs account for the majority of businesses worldwide and are significant contributors to job creation and global economic development.

VenturesNow

Food prices drive second straight monthly hike in Nigeria’s inflation

Published

2 days ago

November 17, 2024

Ifeoluwa Dada

According to official statistics released on Friday, Nigeria’s inflation rate increased for the second consecutive month in October, rising to 33.88% in annual terms from 32.70% in September, mostly as a result of increasing food costs.

In an attempt to boost economic development and strengthen public finances, President Bola Tinubu devalued the naira and reduced subsidies, which caused inflation to spike in the second half of last year.

As the effects of the naira devaluation started to lessen in July of this year, a slew of hikes in the price of petroleum and devastating floods that destroyed crops once again exacerbated pricing pressures, making the greatest cost-of-living crisis in decades worse in Africa’s most populous country.

According to the National Bureau of Statistics, price increases for basics such as rice, maize, bread, potatoes, and cooking oil prompted food inflation to surge from 37.77% in October to 39.16% year over year.

This year, more than 1.5 million hectares of agriculture have been damaged by torrential rain and floods in 29 of Nigeria’s 36 states, leaving millions hungry and displacing large numbers of people.

In an effort to curb inflation, the central bank has raised interest rates five times this year. On November 26, it is expected to make its final rate decision of the year.

VenturesNow

MTN financial report reveals drop in group service revenue

Published

2 days ago

November 17, 2024

Ifeoluwa Dada

Due to operational difficulties in Sudan and the depreciation of the Nigerian naira, MTN Group, Africa’s largest telecom provider, announced on Thursday an 18.5% decline in service revenue for the third quarter that concluded on September 30.

With 288 million users in 17 African regions, MTN said that its group service revenue dropped from 156.3 billion rand ($6.99 billion) in the same quarter of the previous year to 127.4 billion rand.

Despite stating that “the naira was less volatile on a sequential basis in Q3 than in preceding quarters,” the business reported a 48.7% decline in MTN Nigeria’s income due to the currency’s depreciation.

Due to a stronger Ugandan shilling than the previous year, Uganda’s largest contributor, MTN South Africa (MTN SA), expanded by a meagre 3.3%.

Due to “subscriber registration regulations in Nigeria and a decline in users in Sudan, where the conflict has displaced millions of people,” the business reported that its subscriber base increased by 1.6% to 288 million.

Given the higher demand in Nigeria despite the legal obstacles, MTN plans to increase its capital expenditures, which it expects would total between 28 and 33 billion rand for the entire year.