Nairobi, Kenya: The African Guarantee Fund for Small and Medium sized Enterprises (AGF) has completed its USD 35million acquisition of Guarantee Fund for Private Investments in Africa (GARI). The process that began in April 2014 has been approved by the Central Bank of West African Economic and Monetary Union (WAEMU) and will culminate in AGF’s acquisition of 80.56 percent of the outstanding shares of GARI.
GARI was incorporated as an initiative of international development organizations - namely French Development Agency (AFD), European Investment Bank (EIB), Deutsche Entwicklungsgessellschaft (DEG), Secrétariat d’Etat à l’Economie (SECO).
Commenting on the transaction, Felix BIKPO, Chief Executive Officer of AGF said, “This is indeed a momentous time for us as AGF. Through the geographical orientations of AGF and GARI Fund our regional coverage will be strengthened thereby resulting in a real Pan-African guarantee fund. This consolidated entity will be more financially viable as a result of a higher shareholder fund, higher revenues and lesser costs.”
The acquisition of GARI Fund accelerates AGF's commercial presence across the continent, strengthening its already robust pipeline. The immediate access to a bigger banks network will enable both institutions to leverage on a bigger customer’s base by combining AGF’s partners who operate outside West Africa and GARI’s partners who operate in West Africa. The consolidated entity will also benefit from greater operating efficiencies that will result in the issuance of increased financing to Africa’s SMEs, at longer tenors which will ultimately enable SMEs to grow and play their expected critical role in job creation and poverty alleviation in Africa.
The transaction is one of its kind, since it is the first south-south transaction involving two guarantee funds in Africa.