African Guarantee Fund (AGF) has set aside $170 million (Sh17.1 billion) to back Kenyan bank lending to small and medium-sized enterprises (SMEs) through a scheme that will insure the lenders against defaults.
AGF typically guarantees half of the value of a loan balance to a single SME borrower or half the value of an outstanding SME loan portfolio and charges banks a fee of between 1.5 percent to three percent for the risk guarantee.
