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FDH partners AGF in $3m SME financing deal

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By Chimwemwe Mangazi:

Expectations are high that concerns of lack of finance among small and medium enterprises (SMEs) in the country will be lessened following a partnership FDH Bank has entered with the African Guarantee Fund (AFG) to access $3 million that will be loaned out to SMEs.

The partnership comes at a time statistics indicate that 75 percent of all SMEs in Malawi do not have access to formal financing while 59 percent are entirely excluded from the formal finance sector.

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FDH Bank Managing Director, Eric Ouattara, said the partnership is an extension of an initial deal where 2,000 farmers from across the country benefitted and were able to pay the entire loan to the fund.

“This is very important for us. When we say grow with us, it is the SMEs that will grow with us and it is very good that we have entered a partnership that will allow us to reach out to more SMEs with financing solutions and it is fundamental because they also create jobs,” Ouattara said.

African Guarantee Fund Chief Executive Officer, Felix Bikpo, said SMEs are the engine of economic growth in Malawi and the entire continent and need to be supported in every way to achieve the desired growth.

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Minister of Finance, Economic Planning and Development, Goodall Gondwe, said, despite financial challenges facing the sector, there is an inferirity complex among SMEs that hinder them to grow.

He advised the SMEs to be positive in their business ventures to succeed.

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