Absa Group, one of the largest banks in Africa, has signed a deal with Multilateral Investment Guarantee Agency (MIGA) which will boost lending for SMEs in Africa.
According to Business Live, the banking group is the first African bank to enter into such an agreement, looking to promote investment by guaranteeing against risks.
The $497m guarantee will shield Absa against political risk and assist expand financing across seven African nations. As a result, its subsidiaries will be able to issue more loans to corporates and SMEs in the region.
The guarantee will shield Absa subsidiaries from risks emanating from mandatory capital reserves. Subsidiaries in Kenya, Ghana, Seychelles, and Mozambique will receive the 15-year guarantee from the world bank organization. Moreover, Absa in Mauritius, Uganda, and Zambia will also secure the guarantee, boosting their lending capacity.