IFC signs agreement with EIB and Ecobank to boost SME financing across Africa
They will share 25 percent of the risk in a $110 million facility.The International Finance Corporation (IFC) has signed a risk-sharing agreement with the European Investment Bank (EIB) and Ecobank that will help fill the gap in financing for small and medium-sized enterprises across sub-Saharan Africa.
EIB and Ecobank will join IFC’s existing risk-sharing facility, which was launched in May 2015 to overcome the challenges of lending to smaller businesses which have a higher risk profile. They will share 25 percent of the risk in the $110 million (€98 million) facility.
"SMEs in Africa face a huge funding gap, and partnerships like this are critical to helping these SMEs to grow and create jobs. By leveraging IFC’s wide network of partners, the unique structure of the Global SME Finance Facility is able to target the finance gap more effectively," said IFC’s Director for Western and Central Africa, Vera Songwe, at the Africa CEO Forum in Abidjan.
The facility - a blended finance vehicle which integrates both investment and advisory services to banks - will target Burundi, Chad, Côte d’Ivoire, Democratic Republic of the Congo, Guinea, Mali and Togo.
It mobilises funding from donors, international finance institutions and the private sector to help banks de-risk and scale up SME lending.