Equity Group Holdings Plc (EGHL) and the African Guarantee Fund (AGF) have signed a $500mn risk-sharing agreement aimed at unlocking $1bn in credit for Micro, Small and Medium Enterprises (MSMEs) across five African countries.

EGHL, a Pan-African financial services holding company, is listed on the Nairobi Securities Exchange, Uganda Securities Exchange, and the Rwanda Stock Exchange.

Announced on May 9, the new facility targets businesses in Kenya, Uganda, Rwanda, Tanzania and the Democratic Republic of Congo (DRC), and is projected to support over 50,000 jobs, especially for youth and women-led enterprises.

The rollout begins with a $115mn tranche already committed to EGHL’s subsidiaries in the five countries. Both institutions confirmed that this is the largest single guarantee engagement in AGF’s history. EGHL has banking operations in seven African countries. AGF is a pan-African non-bank financial institution backed by development partners including the African Development Bank (AfDB), the Danish government, and KfW of Germany.

“This expanded partnership with the African Guarantee Fund underscores our shared vision of empowering MSMEs, which are the backbone of African economies. Through this initiative, we’re not only promoting financial access but also preserving jobs and fostering sustainable growth across the region,” EGHL Managing Director and CEO James Mwangi said.

“Our renewed partnership with Equity Group further increases our footprint and impact in the region. We expect to see more people employed, more businesses growing from small to medium scale, and stronger overall economic resilience,” AGF Group CEO Jules Ngankam said.

The move reflects a growing trend of using blended finance to de-risk lending and close Africa’s $330bn MSME credit gap, identified by the International Finance Corporation (IFC). In a region where MSMEs provide over 80% of jobs and contribute up to 40% of GDP, according to the African Development Bank, limited access to affordable credit continues to stifle growth. By combining AGF’s guarantee capacity with Equity’s regional banking footprint, the initiative aims to channel capital where it is most needed and help build resilience across vulnerable economies.

The new agreement builds on a partnership first launched in 2018 and expanded in 2020 through a $75mn facility that enabled loans totalling more than $160mn to nearly 2,000 MSMEs, including 500 women-led and 900 youth-led businesses.

In addition to credit expansion, both institutions are promoting green and blue economy financing. AGF’s Green Guarantee Facility and Equity’s lending programmes will support businesses involved in sustainable freshwater and coastal activities. The partnership also includes staff training in gender-smart investing to strengthen inclusive lending practices within the Equity Group network.