Unlocking Capital for Growth: MIGA and Absa Group's Strategic Partnership
Across Africa, the path to economic growth remains uneven. Despite its potential, many African countries struggle to provide adequate financing for small and medium enterprises (SMEs) and climate-smart initiatives that are essential for sustainable development. Absa Group, one of the continent's largest financial services providers, found itself facing this very challenge. Stringent regulatory capital requirements were restricting the bank's ability to lend in key markets (Ghana, Kenya, Mauritius, Mozambique, Seychelles, Tanzania, Uganda and Zambia), particularly when it came to supporting SMEs and green projects — areas often viewed as higher risk.
PROJECT HIGHLIGHTS
In 2019, MIGA made $497 million in capital optimization guarantees to Absa Group, one of Africa's largest financial institutions. In 2024, it expanded its partnership to $1.1 billion.
The capital optimization guarantees allowed Absa to reduce risk on its existing mandatory and voluntary reserves unlocking an estimated $706 million of new loans, of which $489 million will finance climate projects and the remainder will support additional financing for small and medium-sized enterprises.