Guaranty Trust Bank (GTBank) has partnered with Agence Francaise de Developpement (AFD) to launch a N3 billion Ariz Portfolio Guarantee Scheme to fund business startups and development projects in Nigeria.
The partnership, the first in Anglophone Africa, supports the growth of small and medium size enterprises (SMEs) by providing a risk sharing mechanism on loans.
The scheme provides banks, private equity investors, and other financial institutions a safer platform to increase participation in SME financing by providing foreign guarantees for loans granted to SMEs.
Since its inception in 2008, it has expanded to over 20 francophone countries in Africa and teamed up with more than 40 banks worldwide.
The scheme has seen a steady rise in the number and volume of guarantees allocated (up 80 per cent annually over the past three years), and an increasing number of companies have been able to develop each year, with thousands of jobs created.
French Ambassador to Nigeria, Denys Gauer, said SMEs “have a key role as drivers of economic growth and employment.
“However, despite the widespread presence of SMEs in Nigeria, the sector faces major obstacles such as the limited access to bank financing, mostly because of the risk factor associated with SMEs.
“The objective of this scheme is to facilitate SMEs’ access to finance by supporting the development of the GTBank portfolio of SME loans.”
GTBank Managing Director, Segun Agbaje, reiterated that empowering SMEs is pivotal to growth and development in emerging economies across the world.
“This sector remains crucial to the economic make up of Nigeria yet contributes little to our national GDP (Gross Domestic Product). We are determined to help rewrite this narrative by boosting access to long term financing for the sector,” he pledged.
“The partnership with AFD is the first for any Anglophone speaking country and reaffirms the bank’s commitment to building a strong SME sector buoyed by easy access to long term financing.
“As a bank, we will continue to provide solutions to help smaller businesses build capacity and improve their knowledge of managing businesses.”
Earlier in the year, using its SME MarketHub platform, GTBank organised a training programme for small business owners on capacity building, business ethics, and global best practices.