BOI, AGF sign $50m deal to support women-owned SMEs

The Bank of Industry (BoI) has signed a $50 million portfolio guarantee agreement with the African Guarantee Fund (AGF) to unlock unprecedented financing for women entrepreneurs and micro, small, and medium enterprises (MSMEs) in Nigeria.

The agreement was signed on Thursday at the Africa Investment Forum (AIF) in Rabat, Morocco.

A financial guarantee is an agreement that guarantees a debt will be repaid to a lender by another party if the borrower defaults.

In a statement, the BOI said the portfolio, which is in support of the Affirmative Finance Action for Women in Africa (AFAWA) launched by the African Development Bank (AfDB), guarantees up to N75 billion.

Speaking at the signing ceremony, Olasupo Olusi, managing director and chief executive of BoI, said the landmark initiative represents the dawn of a new chapter for small businesses which have struggled with limited access to finance.

He also said the bank would deepen its commitment to Nigerian enterprises and provide them with resources to scale their operations, innovate for impact, and expand into new markets.

The CEO said the deal promises to drive inclusive growth, innovation, and sustainable development as well as unlock unprecedented opportunities for enterprises.

“By prioritising women-owned businesses and environmentally sustainable enterprises, we are saying that women must not just participate in Nigeria’s economic history, they must lead it,” Olusi said.

“We are saying that sustainable, climate-conscious practises are not functional, but they are imperative.

“There are a number of women enterprises in Nigeria, and there are partnerships. Recently, we signed the Wi-Fi Code in partnership with the Central Bank of Nigeria and the Development Bank of Nigeria to compete to finance women enterprises.

“This agreement or partnership with the AGF will enhance the capacity to deliver much-needed credits to women-owned institutions and businesses in the country. We are looking forward to the partnership.”

Olusi also commended the AGF for its unwavering commitment to supporting development across the continent.

“Your work in de-risking investments and enhancing financial inclusion has been instrumental in enabling transformative change, and we are honoured to collaborate with you on this mission,” he added.

The partnership, according to statement, includes a comprehensive risk-sharing mechanism that focuses on supporting MSMEs, women-owned enterprises and green businesses to promote environmental sustainability and gender equity.

Jules Ngankam, AGF group CEO, described the transaction as a great milestone that would impact Nigeria’s economy by unlocking up to $100 million in financing for SMEs.

Ngankam said the AGF will also provide tailored guarantees and technical assistance towards the special SME products offered by BOI, targeting women, youth, and green businesses.