From Nairobi to Pretoria, regional and national guarantee mechanisms are reshaping Africa’s credit landscape and driving industrial transformation
LAGOS, June 9, 2025 – AfricaHeadline
Guarantee funds are becoming a cornerstone of Africa’s economic recovery and industrialisation. With more than $6 billion in active credit guarantees by 2025, these institutions are playing a critical role in unlocking financing for agriculture, industry, innovation, and cross-border trade. The continent’s five leading guarantee funds stand out not only for their scale but for their impact on inclusive economic growth.
AfricaHeadline Reports Team
editorial@africaheadline.com
African Guarantee Fund (AGF) – A Pan-African Powerhouse
Headquartered in Nairobi, the African Guarantee Fund (AGF) is a leading continental institution supporting credit access for small and medium-sized enterprises (SMEs). Established in 2011 by the African Development Bank (AfDB), in partnership with DANIDA (Denmark) and AECID (Spain), the AGF has mobilized over $2 billion in guarantees since inception.
As of 2025, its active guarantee portfolio exceeds $750 million across 42 African countries.
In 2024 alone, AGF supported more than $800 million in credit guarantees to over 12,000 SMEs, creating 90,000 direct jobs, 40% of which are held by women. Its specialized products include the Green Guarantee Facility (for clean energy projects) and the Women SME Guarantee Programme, both central to its inclusive financing strategy.
Beyond guarantees, AGF invests heavily in technical assistance and capacity-building for financial institutions and SMEs. In 2025, it launched a $250 million co-guarantee initiative with the Mastercard Foundation and Germany’s KfW to support SME digitization. AGF aims to reach $5 billion in cumulative guarantees by 2030, aligning with the Sustainable Development Goals.
FAGACE – A Legacy force in Francophone Africa
The Fonds Africain de Garantie et de Coopération Économique (FAGACE), headquartered in Cotonou, Benin, is one of Africa’s oldest and most experienced guarantee funds. Created in 1977, it operates in 14 West and Central African countries. By 2025, it has issued more than $2.3 billion in guarantees, primarily supporting agroindustry, transport, and social infrastructure projects.
Over the past five years, FAGACE has ramped up activity in countries like Burkina Faso, Niger, and Mali, financing projects worth $480 million, including 5,000 agricultural cooperatives and rural SMEs. The fund also guaranteed $100 million for the development of public markets, technical schools, and sanitation infrastructure.
In early 2025, FAGACE launched a new Youth & Tech Startups Guarantee Programme, allocating an initial $60 million to support digital entrepreneurs across Senegal, Togo, and Guinea. With a goal to create 20,000 skilled jobs by 2027, FAGACE is positioning itself as a financial driver for youth-led innovation in francophone Africa.
Angola’s FGC – Powering domestic production
The Angolan Credit Guarantee Fund (FGC) is emerging as a strategic pillar in the country’s economic diversification. With over $250 million in capital, the FGC issued approximately 40 billion kwanzas (around $47 million) in guarantees in 2024 alone, mostly to SMEs and cooperatives in agriculture and food processing.
Aligned with national programmes like PRODESI, Planagrão, and PAPE, the FGC enabled over 1,500 credit operations, covering up to 80% of the risk for participating banks. In 2025, it issued 100 guarantees for agro-industrial projects in provinces like Huambo, Bié, and Malanje, with a strong focus on rural youth and women.
The FGC is also leading financial literacy campaigns and rural banking initiatives. In April 2025, it launched the Digital Guarantee Platform (PDG) in collaboration with the Central Bank and Ministry of Finance, streamlining access and transparency. By the end of 2025, FGC aims to surpass Kz 300 billion in total credit guarantees since inception.
SEFA Guarantee Scheme – South Africa’s backbone for MSEs
South Africa’s SEFA Guarantee Scheme, operated by the Small Enterprise Finance Agency (SEFA), continues to play a pivotal role in financing micro and small enterprises. In 2024 alone, SEFA issued $240 million in guarantees through major local banks such as Absa, Nedbank, Capitec, and Standard Bank.
Between 2020 and 2025, the fund supported over 22,000 MSEs, with a strong focus on underserved rural provinces like Limpopo, Eastern Cape, and KwaZulu-Natal. In 2024, SEFA enabled funding for 7,200 women entrepreneurs and over 3,000 youth-owned enterprises, helping combat structural unemployment and inequality.
For 2025–2026, the South African government allocated R500 million (approx. $27 million) to expand guarantees to the informal sector, aiding street vendors, cooperatives, and self-employed workers. Additionally, a $30 million Green Enterprise Guarantee Facility was launched in partnership with the World Bank and DBSA to support climate-friendly business models.
AFGAP – Strengthening Intra-African trade
The Afreximbank Guarantee Programme (AFGAP), operated by the African Export-Import Bank and headquartered in Cairo, is at the forefront of supporting cross-border trade and regional integration under the African Continental Free Trade Area (AfCFTA). As of May 2025, AFGAP manages over $1.7 billion in active guarantees across 30+ countries.
AFGAP covers commercial, sovereign, and currency-related risks, facilitating trade flows between African countries. In 2024, the programme backed $500 million in agricultural export trade between Ethiopia, Kenya, and the DRC, and $200 million for the expansion of trade corridors between West and Central Africa.
Afreximbank aims to raise its guarantee volume to $5 billion by 2027 and recently launched AFGAP Connect, a digital platform linking banks, insurers, and exporters. In parallel, it introduced a $100 million Pharmaceutical Industry Guarantee Fund to stimulate local medicine production and reduce dependency on imports.
These five institutions are quietly reshaping the foundations of credit across Africa. By mitigating lending risk, expanding financial inclusion, and promoting productive investment, they are empowering thousands of SMEs and catalysing job creation.
With growing investor confidence, regional cooperation, and an expanding digital footprint, these funds are expected to mobilize over $15 billion in guarantees by 2030, transforming Africa’s development narrative from aid-dependency to productive self-sufficiency.
