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East African SMEs mainly in Kenya, Uganda and Tanzania to receive a 4-year senior/ mezzanine debt facility of $1 million given by the Eastern and Southern African Trade and Development Bank (TDB) SME Programme.

The TDB gave the funds as part of its mandate to strengthen the entrepreneurial fabric of the region while the funds will be managed by the Grassroots Business Fund (GBF).

The project will focus on women or youth-led SMEs operating in the agricultural sector with solid managerial foundations and a high potential for social impact.

The African Guarantee Fund (AGF) enhanced the transaction with a partial risk guarantee of 50 per cent with up to 75 per cent in the case of women-led SMEs.

In Kenya, Uganda and Tanzania, agriculture contributes approximately 30 per cent of GDP while in employment it contributes between 55 per cent and 70 per cent of all jobs and 77 per cent of all female jobs.

In Sub-Saharan Africa, the SME financing gap is valued at $331 billion for formal SMEs including $49 billion for women entrepreneurs.

“Rolling-out our SME Programme has enabled TDB to impact further a business segment which makes a massive contribution to the livelihoods of our peoples. We are therefore delighted with the signing of this blended finance transaction with GBF and AGF, together with which we are implementing a targeted regional approach to increase our support to SMEs, which are central to the realization of sustainable development goals in East Africa and indeed, globally,” said Admassu Tadesse, TDB President and Chief Executive.

Gloria Mamba, TDB Coverage Executive for Southern Africa said that their programme is focused on exploring new innovative business models products in the SME space.

“GBF is a leader in supporting agribusinesses, which form the backbone of the economy in our region and AGF is committed to facilitating access to finance for SME’s. This transaction allows us the opportunity to extend mezzanine debt to agribusinesses who often struggle to find the appropriate finance to fund their growth. We are all excited about this transaction with TDB and AGF, which serves to connect local businesses with domestic and international capital, markets, and business development assistance.” Added Ms Gloria

The African Guarantee Fund for Small and Medium-sized Enterprises (AGF) is a non-banking financial institution that contributes to the promotion of economic development in Africa.

Also Read: UAE- Khalifa Fund signs $25m for SMEs in Mozambique

Source of original article: Industry and Trade – The Exchange (theexchange.africa).
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