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Proparco is renewing its support to Ivorian and Senegalese microenterprises and SMEs via a loan to COFINA Group
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Proparco and Cofina, have signed a loan agreement that will facilitate access to credit for microenterprises and small and medium-sized enterprises (SMEs) and help them play their key role in the economy in these difficult times.
Supporting the financial inclusion and financing of microenterprises and SMEs in the mesofinance segment
In Côte d’Ivoire, it is still sometimes difficult for small and medium-sized enterprises to access bank loans. A number of Ivorian SMEs also mention the difficulty in accessing credit as one of the main barriers to their development. The financial inclusion of economic players from the “missing middle”, those who are on the mesofinance market between microfinance and the banking system, is of particular concern as they are often very poorly served by traditional financial institutions.
The pan-African group COFINA (African Finance Company) is a reference on the microfinance market, was one of the precursors and today spearheads it. It operates in 7 West and Central African countries and is now a key player in financing entrepreneurship in the private sector. The Group targets a client base underserved by the traditional financial system by offering customized products and services that meet the specific needs of microenterprises and SMEs, especially those in the informal sector which do not have access to financing.
Proparco is supporting the growth of the activities of COFINA Côte d’Ivoire and COFINA Senegal with a EUR 10m loan for the development of their range of products
This financial instrument provides a response to the main challenge the institution is currently facing: obtain appropriate resources to support the growth of its loan portfolio and allow it to develop its range of support for entrepreneurs. SMEs will consequently be able to benefit from additional credit, which is of significant importance for mitigating the financial impact of the global pandemic.
Jean-Luc Konan, Chairman and CEO of COFINA, welcomed the signing of this financing which will increase the mesofinance institution’s capacity to support entrepreneurs, microenterprises and SMEs in Côte d’Ivoire and Senegal. “Our immediate impact on our economies will be scaled up, especially during this period, and this will allow us to better meet the financial needs of our clients.”
Fatoumata Sissoko-Sy, PROPARCO’s Regional Director, pointed out “that AFD Group launched the Choose Africa initiative in 2019, which aims to earmark EUR 2.5bn to finance and support 10,000 start-ups, microenterprises and SMEs in Africa by 2022. This commitment to our partners is especially significant in the current crisis and supporting a key mesofinance player is a priority for PROPARCO. Indeed, this loan will allow COFINA to scale up its support to the Ivorian and Senegalese economies during this difficult period and will help companies get through this crisis.”
This loan should provide 1,278 Ivorian and Senegalese microenterprises and SMEs with access to a range of financing and 442 individual beneficiaries should have access to an essential service. It will also safeguard over 20,000 direct or indirect jobs.
By allowing COFINA to increase its loans to local SMEs, this operation will have a significant impact on inclusive economic growth, in line with Goals 8 (Decent work and economic growth) and 10 (Reduced inequalities) of the Sustainable Development Goals and fully consistent with the Paris Agreement.