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African Guarantee Fund Partners Diamond Bank To Support Small Businesses In West Africa

More support has come the way of leading retail bank, Diamond Bank PLC in its drive to provide adequate support for Micro Small and Medium Scale Enterprises (MSMEs) in West Africa. This time, the African Guarantee Fund (AGF) has entered into an agreement with Diamond to support the bank’s lending to small businesses in the region to the tune of USD 25 Million.

Speaking at a press conference held after the partnership agreement signing ceremony, Executive Director –Retail Banking, Diamond Bank PLC, Mr. Uzoma Dozie, said the Bank was delighted by the partnership as it was an indication that the Bank’s support for MSMEs is laudable and that the Bank would continue to provide more support for the vital business segment.

According to the Chief Executive Officer, African Guarantee Fund, Mr. Felix Bikpo, “In Africa, majority of the economic growth is trade driven. Once trade is backed out, we have little or nothing. AGF is positioned to drive real economic development that takes Africa back to what it was in the past where a lot of its growth was driven at the local level. What we are doing in the AGF is to partner with like-minded institutions to provide adequate support for MSMEs to function actively in the sector. We are glad to partner with Diamond Bank as we have found their MSME support strategy to be the right one.”

Under the terms of the USD 25 Million agreement, Diamond Bank affiliates in Togo, Benin, Senegal, Côte d’Ivoire and Nigeria will work together with AGF to increase lending to MSMEs to unlock the potentials within them in the region.

“One of the major constraints faced by small businesses is the restricted access to credit. MSMEs cannot access finance due to unavailable or inadequate collateral security, lack of financial or other records and are therefore perceived as highly risky by banks. What we seek to achieve with this partnership is to provide unsecure lending to small businesses to the tune of USD 25 million with the AGF guarantying or, if you like, insuring 50% of the funds. This partnership would also help us extend our MSME support franchise to Diamond Bank subsidiaries in Franco-phone West Africa for we believe they constitute the engine of economic growth for the region,” explained Mr. Jude Anele, Head of the Retail Banking Division at Diamond Bank.

Launched in 2012, the African Guarantee Fund is a joint venture between the African Development Bank, the Danish and Spanish Governments. The organisation is a permanent regional conduit for channeling guarantees and technical assistance to financial institutions in Africa with the objective of generating enhanced growth in the MSME sector, thereby creating increased employment opportunities in African economies.

Diamond Bank has come to be regarded as the leading supporter of small businesses in Nigeria, granting well over N120 billion in loans to more than 120,000 MSMEs in Nigeria since 2009. The Bank boasts of a dedicated MSME team with a deep understanding of the concerns bothering small businesses and have consequently developed a methodology that has allowed the bank lend to MSMEs with little or no collateral security. The Bank also provides non-financial support ranging from access-to-market initiatives to capacity-building seminars and clinics to MSMEs.

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