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Agreement for the new Business Guarantee Fund signed in Equatorial Guinea

posted by www.equatorialguineaonline.com – May 1st, 2013

The new Partial Guarantee Pilot Fund for the Creation of Small and Medium Enterprises is an initiative of the Government, through the Ministry of Finance, Commerce and Business, to enhance business development of our country. By signing this agreement, the Government, through the Economy Department, provides a guarantee of payment to the National Bank of Equatorial Guinea (BANGE) in lending to small and medium entrepreneurs, to cover their debt in case of default.

The signing ceremony of the agreement took place at the Ministry’s headquarters, in Malabo II, and was attended by Minister Celestino Bakale Obiang and the BANGE director, and others representatives of banks and numerous representatives of small and medium enterprises (SMEs), who came to learn the conditions of this new fund.

During the ceremony, the Director of the National Institute for Development and Business Promotion (INPYDE), Ricardo Maximo Torao Oyo, said that “the Government is aware of the difficulties of many small businesses to obtain loans from banks, and the risks that they must be take, it has made this fund available to all, to serve as collateral to recover the money given to small businesses in theevent of insolvency.”

The agreement was signed between the Ministry of Economy and the BANGE. According to it, the Executive will cover up to 40% of the debt the small and medium businesses have with the bank on loans applied to the creation of their companies, in case of not being able to cover them themselves. To do this, the SMEs, when applying for a loan with the BANGE, must complete a series of requirements stated in the agreement, such as presenting a business plan or operating for profit, among others.

After reading the agreement and signing it, the Minister of Finance gave a short speech noting that the initiative comes from the will of the President of the Republic to enhance the business environment, a critical step in the overall development of the nation: “The current situation of our economy is an opportunity to do more things, and business development is the backbone in the goal we have set,” said the Minister, who also said that “this fund cannot be considered a mechanism to subsidize companies, but rather so the financing risk is shared between the public and the commercial banks.” Finally, Celestino Bakale recalled that the main objective of this initiative was to “create jobs and create a competitive business environment.”