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Société Générale Ghana Partners with African Guarantee Fund to Provide Financing Solutions to Ghanaian SMEs

Societe Generale, African Guarantee Fund partner for GH¢35m SME financing

Consistent with its goal of driving economic transformation through financing Small and Medium-sized Enterprises (SMEs), financial services provider Societe General has entered into a partnership agreement with the African Guarantee Fund (AGF) to provide a guarantee facility of GH¢35million for domestic businesses.

Speaking during a signing ceremony to formalise the arrangement, Managing Director of Societe Generale Hakim Ouzzani stated that the deal will see his outfit underwrite 50 percent of qualified exposures.

“Considering the significance of SMEs to the economic development of Ghana, it is only right that we provide them with the necessary support through increased access to financing. Our partnership with AGF will provide us with the opportunity to finance any type of facility with tenors for up to five years, including letters of credit and an increased individual SME limit of GH¢3.5million,” he remarked.

The MD explained that the deal adds to his outfit’s rapidly-expanding catalogue of SME-focused financing and advisory solutions. 

“After the signing of a US$50million five-year credit facility arrangement with the IFC in 2020, which was partially disbursed in 2020 to finance SMEs; creation of the SG Ghana Home of Business in 2019 – providing free advisory services and capacity building to SMEs; the signing of a previous risk-sharing facility in 2020; and creating the innovation hub in 2022 to support start-ups, our bank is building a comprehensive set of tools to support SMEs in Ghana. And the results are tangible – our SME loan book has more than doubled in three years.”

Mr. Ouzzani further stated that the facility will pay particular attention to women-owned and managed enterprises, as well as those that are climate-focused and qualify for green financing; adding that for businesses in this category, the risk cover could be extended to as much as 75 percent. 

AGF West Africa Managing Director, Bendjin Kpeglo, explained that the Fund has a history of fruitful partnerships with Societe Generale, adding that Ghana’s socioeconomic stability and prospects informed the decision to foray into its market.

“We are excited to partner with Societe Generale Ghana, which is strongly committed to growing its SME lending strategy. AGF has issued several Loan Individual Guarantee facilities directly to enterprises within the hospitality and agribusiness sectors in Ghana, but through this loan portfolio guarantee facility we will now support SME lending on a much larger scale, which will indeed drive the country’s economic growth.”

Reiterating the point earlier stated by the Societe Generale MD, he noted that through the African Development Bank’s Affirmative Finance Action for Women in Africa (AFAWA) programme, and AGF’s Green Guarantee Facility, women and environmentally-responsible businesses will be given further consideration. “We will enable the bank to scale-up lending to women and green businesses respectively, which are among our priority areas as we work toward fostering financial inclusion and sustainable development.”

 

SOURCE | thebftonline.com

 

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