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African Development Bank (AfDB) has signed a $50 million financing agreement with Nigeria’s Bank of Industry (BOI) to provide loan portfolio guarantee for small and medium scale enterprises (SMEs), especially women-led enterprises, in the country.

The African Guarantee Fund (AGF) and BOI signed the agreement at the Africa Investment Forum in Rabat, Morocco, on 5 December 2024. The transaction will be phased out in three tranches over a 10-year period, according to a statement by AfDB.

The new deal will support women-led businesses via the AfDB’s AFAWA Guarantee for Growth programme, which makes financing available for women entrepreneurs through de-risking and technical assistance measures. The AGF implements the AFAWA Guarantee for Growth programme.

“This strategic partnership illustrates the commitment of the African Development Bank, especially the Affirmative Finance Action for Women in Africa initiative, to empower women entrepreneurs and foster economic growth in Nigeria,” Beth Dunford, AfDB’s Vice President for Agriculture, Human and Social Development, told the attendees at the signing ceremony in Rabat. “This is not just a financial transaction aimed at supporting and catalysing the growth of small and medium enterprises in Nigeria – it is a beacon of hope and progress for African businesses, particularly for those led and owned by women.”

The partnership includes a risk sharing mechanism that focuses on supporting micro, small and medium enterprises, women-owned enterprises, and businesses that promote environmental sustainability and gender equity.  

According to Jules Ngankam, African Guarantee Fund Group Chief Executive Officer, the transaction will significantly impact Nigeria’s economy by unlocking up to $100 million in financing for small and medium enterprises. He said the AGF will also provide tailored guarantees and technical assistance towards the special SME products offered by BOI that target women, youth, and green businesses.

“Bank of Industry is excited to leverage the guarantee framework of the African Guarantee Fund in promoting sustainable growth, gender equity, innovation and advancing more credit to small and medium enterprises in Nigeria in line with Nigerian President Bola Tinubu’s government’s Renewed Hope agenda,” said Olasupo Olusi, Bank of Industry’s Managing Director and CEO.

Through the AfDB, AFAWA has approved more than $2.4 billion in lending for Africa’s women-led SMEs, as well as partnered with 185 financial institutions responsible for disbursing the funds across 44 African countries, according to the statement sent to Financial Nigeria. The initiative has unlocked financing to more than 18,600 women-led SMEs.

AFAWA is supported by the African Development Bank's partners and donors: the Women's Entrepreneurs Finance Initiative (We-Fi), G7 participating countries Canada, France, Germany and Italy as well as the Netherlands and Sweden.