Pan-African non-bank financial institution African Guarantee Fund (AGF) has received an Insurance Financial Strength (IFS) rating of AA- (very strong) with a stable outlook from global rating agency Fitch.
The agency said the rating reflects AGF financially strong owners, strong capital position and proven business model as provider of local currency guarantees for small and medium-sized enterprises (SMEs) in Africa.
AGF assists financial institutions in Africa to scale up SME financing through provision of partial loan guarantees and capacity development assistance.
Since its official launch in 2012, it has provided Sh8.24 billion ($80 million) of guarantee fund to six Kenyan financial institutions. AGF chief executive Felix Bikpo said this is the first time in Africa a guarantee fund has been assigned this status and the second for Africa-based financial institution after the AAA accorded African Development Bank (AfDB).
“As AGF’s primary objective is to reduce the funding gap for African SMEs, profitability is not the main performance metric,” the agency said.