Nigeria’s GTBank launches over $15m SMEs development scheme
Lagos, Nigeria - October, 2015
Nigeria’s Guaranty Trust Bank Plc has launched a N3 billion (about $15.2m) scheme in partnership with Agence Française de Development (AFD) to promote Small and Medium Enterprises (SMEs) development in Nigeria.
According to a statement issued by the bank in Lagos, the initiative is designed 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,” it said. It added that the 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.
The Ariz Portfolio Guarantee Scheme, since its inception in 2008 had expanded to over 20 francophone countries in Africa and teamed up with more than 40 partner banks worldwide. The statement quoted Denys Gauer, the French Ambassador to Nigeria, as saying that “SMEs has a key role as drivers of economic growth and employment.”
The envoy noted that in spite of widespread presence of SMEs in Nigeria, the sector faces major obstacles, including limited access to bank financing, mostly because of the risk factor associated with SMEs.
Gauer said that the objective of the scheme was to facilitate SMEs’ access to finance by supporting the development of the GTBank portfolio of SME loans.
The statement added that Mr. Segun Agbaje, GTBank Managing Director, said that empowerment of SMEs remained pivotal to the sustenance of growth and development in emerging economies across the world.
Agbaje said that the sector though crucial to the economic make-up of the country, contribute little to the national Gross Domestic Product (GDP).