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Small and medium enterprises in supply chains across Africa are set to benefit from funding worth more than $125 million from the African Development Bank (ADB).
The four-year programme, which includes $125 million in direct funding and a further $3.98 million in the form of a technical assistance package, will enable banks to provide standardised lines of credit to SMEs, with a special focus on female and youth-owned businesses. The funds are intended to boost job creation and economic growth across the continent.
The program was developed to address funding challenges currently being faced by smaller enterprises in Africa, such as the majority of loans available covering just one year and an overall lack of funding.
A statement from the bank said: “In response to these challenges the ADB, through this SME programme, will provide the necessary longer-term finance and a technical assistance package to address a number of the constraints faced by around 25 target financial institutions and their SME clients across Africa.”
The support pot of $3.98 million will come from the Fund for African Private Sector Assistance (FAPA) and will be used to build the capacity and capabilities of 25 lenders to support SMEs. The contribution marks the highest amount ever donated by FAPA and is intended to broaden support for businesses into more rural areas of the continent, where there are higher numbers of women-owned businesses.