An investment in a risk-sharing facility – worth US$77million for the Bank Of Africa Group (BOA) has been announced by the International Finance Corporation (IFC), at a ceremony held in Abidjan, Côte d’Ivoire.
The investment, according to IFC, aims to ease access to finance for small and medium-scale enterprises (SMEs), including businesses in fragile and conflict-affected countries and the Sahel.
IFC under the agreement will invest US$77million to scale-up BOA’s lending to small and medium enterprises (SMEs), including women-owned businesses in some selected countries such as Ghana, Benin, Burkina Faso, Côte d’Ivoire, Mali, Niger, Senegal, Tanzania, Togo and Madagascar.
This investment, as stated by IFC, will guarantee BOA Group with 50 percent of an aggregate loan portfolio, up to US$154million for distribution to businesses in the agriculture, trade, energy, construction and other sectors.
“Women-owned businesses, which often face barriers to accessing finance, are expected to benefit from at least 2,000 out of the 12,000 new loans to be disbursed under this initiative.
“IFC will also provide advisory services to help BOA strengthen its portfolio of women-owned SMEs, across its affiliates in the ten countries.”
International Finance Corporation (IFC)
Aside other developmental activities and projects that helps to sustain economies, SMEs are the pillar of sustainability for African economies. They account for up to 90 percent of all businesses in sub-Saharan Africa and represent about 38 percent of the region’s GDP. However, many SMEs are held back because of lacking access to finance.
According to World Bank Enterprise Survey Data, the SME finance gap in the ten target countries is US$21billion, and 53 percent of SMEs are either partially or fully credit constrained.
Strengthening SME Sector, Goldman Sachs 10,000 Women Programme
The Group Chief Executive Officer of BOA, Mr. Amine Bouabid said: “At Bank Of Africa, we recognize that small and medium scale enterprises (SMEs) are the backbone of African economies. Because of their immense contribution toward development of the African economy, one of the three focus in our strategy is to increase our loan exposure to SMEs. We strongly believe that this investment will support BOA to strengthen the SME sector.”
The project, according to Mr. Bouabid, aligns with the IFC’s pledge to support reduction of the SME financing gap in sub-Saharan Africa, under the Alliance for Entrepreneurship in Africa.
The IFC’s Regional Industry Director for Africa, Mr. Aliou Maiga has also noted that IFC is deepening its partnership with BOA to reflect a strategy to support financial inclusion, access to credit and, most importantly, support private sector development on the continent.
IFC’s investment is supported by the Global SME Finance Facility (GSMEF), a blended finance partnership with donor funding from the United Kingdom (UK) and Dutch Government.
The support is through programmes such as the Women Entrepreneurs Finance Initiative (We-Fi) – the Women Entrepreneurs Opportunity Facility launched through its Banking on Women Programme – and Goldman Sachs 10,000 Women.
In partnership with the International Finance Corporation (IFC), Goldman Sachs 10,000 Women launched its global finance facility in 2014 to support women entrepreneurs.
So far, the initiative has reached over 200,000 women from over 150 countries The 10,000 Women in-person business education programme was launched in 2008, reaching over 10,000 women across 15 countries around the world; and in 2018 the 10,000 Women curriculum was made available online through Coursera, further democratising access to business education in more corners of the world.
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