SME: The Société de Garantie du Gabon, a small revolution that should produce big effects

Gabonese guarantee company officially launched its activities on Monday, November 14, 2022 © Facebook/ABO

Led by Okoume Capital, a subsidiary of the Gabonese Strategic Investment Fund, the Gabon Guarantee Company (SGG) officially launched its activities on November 14, 2022 in Libreville.

It’s a small revolution that should produce big effects.

With fully paid-up capital of FCFA 12 billion, SGG aims to offer local financial institutions a risk-sharing mechanism through partial guarantee solutions for SME loans.

In concrete terms, the SGG will facilitate access to finance for SMEs by covering up to 50% of the risk of default, i.e. the non-repayment of loans granted to them by banks or microfinance institutions.

Coverage rate increased to 75% for women and the environment

The emphasis will be on SMEs led by women and those whose activities are in line with reducing their carbon footprint. In these cases, the guarantee rate will be raised to 75%.

For SMEs it was a necessity. ” This is a big step forward for local development. This tool is really essential because 60% of SMEs do not have the adequate structure that allows them to access credit. From now on, if I want financing to develop my business, I can go to BGFI Bank, Orabank, Ecobank… and they will go to SGG who will guarantee my credit. » exults Jean Lylian Ngoye Mikela, manager of Exelle BTP+, when asked by our colleagues at the New Gabon.

The raison d’être of the SGG is to solve the difficulties of accessing bank financing that Gabon’s SMEs encounter. Indeed, banks are reluctant to finance SMEs due to the “unreliable” guarantees they present. A study recently conducted in the SME sector by the teams of Okoume Capital of FGIS and that of the Ministry of SMEs revealed that the guarantee needs of local SMEs amount to FCFA 537 billion.

Non-subsidy guarantees

But, the authorities insist, it is really a loan guarantee and not a subsidy. ” We have a tool that allows us to further guarantee loans and SMEs must stand out for their good management, because alongside funding there will be training. It is an essential factor “, recalled the Minister of Economy, Nicole Roboty Mbou, during the launch ceremony.

SGG is the first guarantee issuing financial institution in the sub-region to be licensed by the Central African Banking Commission (COBAC), the regulatory authority in the CEMAC zone. SGG benefits from the technical support of African Guarantee Funds (AGF), a pan-African non-bank financial institution and Entrepreneurial Solutions Partners (ESPartners), a strategy and investment consultancy firm.

On social networks, Gabonese President Ali Bongo Ondimba welcomed the creation of the SGG, saying that SMEs are“a vital segment for the economy”Gabon.“To ensure their development, create new jobs and become national champions, they must have easy access to finance,”He added. This is now the case as of November 14, 2022.

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