Mr Felix Bikpo (right) with Jamii Bora Bank CEO Samuel Kimani in 2013. PHOTO | FILE
Nairobi-based African Guarantee Fund (AGF) has expanded its footprint into West Africa after it bought a majority stake in the Guarantee Fund for Private Investments in Africa (Gari) for Sh3.6 billion ($35 million).
The AGF, which guarantees loans to small and medium enterprises, will now hold an 81 per cent stake in Gari. It is affiliated to the African Development Bank.
AGF chief executive Felix Bikpo said that the acquisition is expected to increase turnover and at the same time reduce costs.
“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,” said Mr Bikpo in a statement.
The AGF reported a Sh100 million ($959,000) loss in 2014, which is lower than the Sh157 million ($1.5m) that was reported a year earlier while total income was at Sh561 million ($5.38m), a 172 per cent increase from the Sh207 million ($1.98m) that was generated in 2013.
The annual report for 2014 shows that the West African region accounted for 53 per cent of business, followed by East and South African regions which both made up 16 per cent while Central Africa contributed the remaining 15 per cent of the firm’s business.
This is the first deal in Africa that involves one guarantee firm buying its peer.
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