FDH Bank on Monday partnered African Guarantee Fund (AGF) to boost small and medium enterprises (SMEs) in a deal worth about $3 million (about K2.25 billion).
AGF is a pan-African guarantee provider established by a number of African governments and operates in 38 countries with more than 100 partner financial institutions.
Speaking at the signing ceremony in Lilongwe, FDH Bank managing director Eric Ouattara said the partnership will unlock financing and accelerate growth of SMEs.
The partnership has come against the backdrop of challenges SMEs face to access finance to grow their businesses.
“The partnership with AGF is, therefore, a strategic move for the bank to be in a position to increase its financing and funding of SMEs in the country and escalate their growth. Special focus will be on women and youth entrepreneurs to facilitate their growth,” he said.
AGF chief executive officer Felix Bikpo said the organisation aims to reduce the continent’s SMEs funding gap through provision of partial credit guarantees and capacity development to financial institutions; hence, partnering with FDH Bank.
“Our commitment is to empower the private sector to expand their businesses. Through FDH Bank, we will increase financing of SMEs and this partnership will not only empower SMEs growth, but also increase job creation,” he said.
On his part, Minister of Finance, Economic Planning and Development Goodall Gondwe hailed the partnership, saying SMEs are key to boosting the country’s economy.
He said: “SMEs sector is one of the key areas in growing the economy, but the environment was not conducive because of high interest rates.
“We have dealt with that and now we want to eradicate power shortages which affect SMEs. We are establishing a bank soon to cater for SMEs and the agriculture sector. This is the time that Malawians should come together and pursue financial growth.”