With a solid AA rating, AGF is about to sign a new acquisition, this time in Southern Africa, which would be added to the acquisition of GARI and, ultimately, form a resolutely pan-African guarantee fund. In this exclusive interview, the CEO, Félix Bikpo, talks about issues and perspectives.
The African Guarantee Fund (AGF) has recently been rated “AA-“, several notches above the investment grade floor. What explains this quality of signature recorded by Fitch Ratings?
The rating reflects an overall appreciation of the vision, the strategy put in place, the business model, human resources and financial strength. It is the evaluation of all these parameters that resulted in such a rating, the highest rating of a financial institution, after that of the ADB AAA. We are one of the highest rated guarantee funds in the world. We are all the more proud that we intervene in the segment of SMEs, perceived as one of the most risky. What’s more, we are a guarantee fund operating in a continent considered at risk. We are very happy to see young Africans use their intellectual skills and cultural differences to create value.
How does your portfolio and financial structure look?
To date, we have been able to issue close to $ 700 million in guarantee, which has made it possible to put a little over a billion dollars of funding at the disposal of SMEs. We arrived at this result in a little over four years of activity, through more than a hundred financial institutions from some forty countries in Africa. This reflects the huge need for SMEs in terms of funding. Guarantee institutions like ours have a key role to play in enabling these small businesses to access financing. Our financial partners are convinced of the accuracy of our strategy.
AGF took over the GARI fund two years ago. What is the new configuration of the whole group?
The GARI fund will be called AGF West Africa. This is already the case. The acquisition of this fund was dictated by the desire to bring us closer to our customers in West Africa. Our job requires proximity and daily contact with the partner to identify risk, anticipate and find a solution. We will give back to GARI, upgrade its governance, give it a seat in Lomé (under construction) and the necessary expertise to meet the demand. After this successful operation in West Africa, we are on a track for an acquisition in Southern Africa. Our portfolio in this region has reached the critical threshold for a strong local presence.
You will not have more than North Africa to complete the coverage of the continent?
It’s a pretty special market. We recently went to meet the authorities and operators of Morocco, Egypt and Tunisia. There are regulatory aspects to overcome. I can tell you that we received a warm welcome from the various authorities.
The classic question posed to any institution that has just been noted: will you raise funds?
In fact, we intend to mobilize $ 420 million over the next two years, including $ 130 million over 2018. We are very advanced on due diligence. The first closing will probably take place next November.
Will there be new entrants in the capital?
Indeed, but I can not give names. We have three classes of actions. Those that carry the immediate loss, mezzanine shares and shares dedicated to companies and pension funds.
How can the signing of the Continental Free Trade Area (FTAA) impact your activities?
You know, the first obstacles to business is access to the market that comes well before funding. What just happened in Kigali on March 21, 2018, opens a perspective on removing barriers to trade. African SMEs have the opportunity to expand their markets and benefit from the demographic levers that have allowed Chinese and Indian SMEs to perform.
About
Felix Bikpo is the Managing Director of African Guarantee Fund (based in Nairobi) and President of the Gari Fund (Lomé). He is Ivorian and holds a degree from the ESSEC Business School in Paris and a Master’s degree in Economics from the National University of Côte dIvoire. To his credit, 26 years of experience in banking and financial services.
During his career, Felix served as CEO of Access Pan Africa (the holding company of Accesss Bank Nigeria Banking Group), General Manager of Atlantic Financial Group, Chief Executive Officer of Ecobank Niger, Executive Director of ETI (Ecobank Group). ) and Vice President at Citibank in charge of financial control for Francophone countries.
Felix was the first General Manager of the Private Investment Guarantee Fund in West Africa (Gari Fund), an initiative of the French Development Agency (AFD), the German Development Agency (DEG), the bank European Investment Bank (EIB), the West African Development Bank (BOAD) with 23 commercial banks.
