THE Guaranty Trust Bank Plc is partnering with Agence Française de Développement, AFD, to launch a N3 Billion Ariz Portfolio Guarantee Scheme to boost financing for business start-ups and development projects in Nigeria.
The partnership with GTBank, which is the first in Anglophone Africa, will support the growth of SMEs by providing a risk sharing mechanism on loan advances. The Ariz Portfolio Guarantee Scheme provides banks, private equity investors and other financial institutions a safer platform to increase participation in SME financing by providing foreign guarantees to local credit facilities advanced to SMEs.
Since its inception in 2008, the Ariz Portfolio Guarantee Scheme has expanded to more than 20 francophone countries in Africa, and has teamed up with more than 40 partner banks worldwide. The scheme has seen a steady rise in the number and volume of guarantees allocated (up 80 percent annually over the past three years) and an increasing number of companies have been able to develop each year, with thousands of jobs created.
According to Denys Gauer, French Ambassador to Nigeria, “Small and medium enterprises, 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.”
Similarly, Segun Agbaje, managing director, GTBank, said: “empowering small and medium scale enterprises remains pivotal to the sustenance of 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. We are determined to help rewrite this narrative by boosting access to long term financing for the sector.
“The partnership with AFD 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 our SME MarketHub platform, we organised a training programme for small business owners on capacity building, business ethics and global best practices.”
— Oct 26, 2015 @ 01:00 GMT