The International Finance Corporation (IFC) has announced an investment in a risk-sharing facility worth US$ 77 million for the Bank Of Africa Group (BOA), at a ceremony held in Abidjan, Côte d’Ivoire.
The investment intends to make it easier for small and medium-sized firms (SMEs), notably companies in unstable and conflict-affected nations and the Sahel, to access financing.
By the agreement, IFC will contribute US$77 million to expand Bank Of Africa’s lending to small and medium-sized enterprises (SMEs), including women-owned businesses, in several particular nations, including Ghana, Benin, Burkina Faso, Côte d’Ivoire, Mali, Niger, Senegal, Tanzania, Togo, and Madagascar.
A total loan portfolio of up to US$154 million will be guaranteed for the Bank Of Africa Group, with loans going to companies in agriculture, trade, energy, construction, and other industries.
Out of the 12,000 additional loans that will be given out as part of this effort, it is anticipated that at least 2,000 will go to women-owned firms, which frequently have difficulty obtaining financing.
In order to help the Bank Of Africa strengthen its portfolio of women-owned SMEs across all of its affiliates in the 10 countries, IFC will also offer consultancy services.
African economies rely heavily on their SMEs. Up to 90% of all firms in sub-Saharan Africa are SMEs, and they provide around 38% of the region’s GDP. Despite this, many SMEs struggle to grow due to a lack of access to capital.
A US$21 billion SME finance gap exists in the 10 target countries, and 53% of SMEs are either totally or somewhat credit limited, according to data from a World Bank enterprise survey.
