Islamic banks would benefit from guarantees for SME financing

The bank lending to the sector is important, primarily for Islamic banks that are intended to be facilitators of the ‘real economy’ more so than their conventional competitors. Guarantee funds can provide a compelling way to expand financing to SMEs because small guarantee amounts can lead to a African Guarantee Fund provided $1.2 million to guarantee against losses for SME financing provided by the Gulf African #Bank. With SMEs holding the key for employment growth in many economies, incentivizing disproportionate increase in financing provided to SMEs.

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