Mogadishu (Kaab TV) – Germany’s Development Bank (KfW) and Gargaara Company Limited, a Somali company signed a grant agreement to provide loans to Somali small and medium enterprises (SMEs) by financial institutions on the basis of transparent, objective and economic criteria.
The Project-Executing Agency will be Gargaara Company Limited. However the agreement was signed in Mogadishu, in the presence of representatives from the Somali Ministry of Finance and the German Embassy.
The grant contribution amounts to 17.7 Million EUR [equivalent to 19.45 Million USD], made available by the German Ministry for Economic Cooperation and Development (BMZ) through KfW Development Bank.
The purpose of this new project is to create and sustain jobs through improved access to financial services.
The project aims to contribute to the formalization and modernization of the financial services sector in Somalia through the provision of loans to SMEs by financial institutions on the basis of transparent, objective and economic criteria.
With the German funding, Gargaara will be able to expand the number of eligible sectors, adding education, health, hospitality and travel to sectors such as renewable energy, agriculture, fisheries, agricultural processing and small-scale manufacturing, which were already established with support by the World Bank.
With this broad coverage, underserved Somali micro, small and medium-sized companies shall be strengthened and encouraged to create jobs and improve their services and products. The project is expected to run from mid-2023 to 2027.