TDB commits Ksh107.6 M to Agribusiness SMEs in East Africa
The Eastern and Southern African Trade and Development Bank (TDB) Small sized-Medium Enterprises (SME) Programme is pleased to announce the signing of an initial 4-year senior debt facility of USD 1 million (Ksh107.6 million)to be managed by Grassroots Business Fund (GBF).
The TDB SME Programme finances agribusiness through the provision of working capital, funding for expansion and support for value addition.
Their aim is to fund agribusiness SMEs in Kenya, Tanzania and Uganda.
The facility will focus on women or youth-led missing middle SMEs operating in the agricultural sector agribusinesses with solid managerial foundations and a high potential for social impact.
“Our objective as we issue this loan portfolio guarantee to Grassroots Business Fund is to mitigate the deterioration of SMEs’ perceived risk. Agribusinesses in particular have been highly disrupted due to the imposed restrictions to curb the spread of COVID-19. AGF is pleased to be part of this partnership that will strengthen and rebuild the East African SME community, which is the region’s growth engine.” AGF’s Acting Group CEO Jules Ngankam said.
The transaction is enhanced with a partial risk guarantee from the African Guarantee Fund (AGF) of 50 percent with up to 75 percent in the case of women-led SMEs.
This transaction comes against the back of disrupted supply chains, higher perceived risks and constrained availability of liquidity as a result of the COVID-19 crisis.
TDB and its partners have together added quivers to their bows to continue driving triple-bottom-line impact into the region.
“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,” says Admassu Tadesse, TDB President and Chief Executive.