African Guarantee Fund and Centenary Bank Extend Partnership to Empower 700 Ugandan SMEs
The African Guarantee Fund (AGF) and Centenary Bank, Uganda’s largest microfinance bank, have joined forces once again to bolster the growth of Small and Medium Enterprises (SMEs) in the country. This renewed commitment is marked by the extension of a USD 25 million Portfolio Guarantee Limit by AGF to Centenary Bank.
This initiative signifies AGF’s unwavering support for Ugandan SMEs, particularly in the trade and construction sectors, which are critical engines of the nation’s economy.
The partnership between the two institutions has already yielded significant results, with AGF’s guarantees empowering Centenary Bank to extend financing to a substantial number of SMEs in the past.
The renewed guarantee facility is projected to unlock close to USD 200 million in financing, directly benefiting more than 700 SMEs. This will provide them with the much-needed financial impetus to expand their operations and propel further growth.
Speaking at the official signing ceremony, AGF Group CEO, Jules Ngankam, emphasized the significance of this renewed collaboration. He highlighted its role in strengthening Centenary Bank’s capacity to provide financing to Ugandan SMEs, with a special focus on women-led businesses and those involved in environmentally friendly practices.
“Our partnership with Centenary Bank represents a significant step in our mission to support SMEs, who account for approximately 90% of private sector businesses in Uganda. By enhancing access to finance for SMEs, particularly those led by women and involved in green initiatives, we are not only fostering entrepreneurship but also contributing to sustainable economic development in Uganda,” Jules remarked.
The collaboration extends beyond the credit guarantee facility. AGF will also provide Centenary Bank with a Capacity Development grant. This grant will be used to streamline credit processes through automation, leading to enhanced efficiency and improved credit analysis for loan applications.
Additionally, a diagnostic assessment will be conducted to equip the bank with the tools necessary to venture more effectively into green financing and financing initiatives targeted towards women entrepreneurs.
Fabian Kasi, the Managing Director of Centenary Bank, echoed the importance of the renewed guarantee limit, emphasizing its potential to primarily benefit the trade and construction sectors. These sectors have been identified as playing a pivotal role in Uganda’s economic development and job creation.
“Through the African Guarantee Fund, we have been able to support over 1,600 SMEs in the trade and construction sectors. These businesses have not only thrived but have also created thousands of jobs, contributing significantly to the socio-economic fabric of our nation while contributing to our environmental and social governance agenda. The direct and indirect benefits of this support extend far beyond the individual businesses, influencing the broader economy and touching countless lives sustainably,” Fabian said.
This partnership is further bolstered by the African Development Bank’s Affirmative Finance Action for Women in Africa (AFAWA) initiative. AFAWA aims to bridge the USD 49 billion financing gap faced by women entrepreneurs across Africa by providing more favorable loan terms and improved collateral requirements.
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Centenary Bank’s dedication to financial inclusion was recently recognized with the prestigious AFAWA Bank of the Year Award at the 2024 African Banker Awards.
The award ceremony, held in Nairobi, Kenya, highlighted the bank’s commitment to supporting women-led SMEs through initiatives like the Cente SupaWoman program. This program offers financial education and business skills training specifically tailored for women entrepreneurs.
The infusion of capital into SMEs is anticipated to have a multiplier effect on the Ugandan economy. By enhancing access to finance, SMEs will be empowered to increase their production capacities, create more jobs, and contribute to higher tax revenues.
This, in turn, will propel Uganda’s GDP on a stronger growth trajectory, fostering overall economic stability and prosperity. The message to business owners is clear: embrace the available credit facilities offered through such impactful funds dedicated to nurturing business growth.
