Senegal: The financial markets as an alternative for SMEs financing

May 13, 2011

Senegalese small and medium-sized enterprises should turn to the financial markets to get finance.

These are the recommendations from the financial experts of the regional council for financial markets (CREPMF), after a workshop organised on May 9th in Dakar, SudQuotidien newspaper reports.

According to the CREPMF, banks do not play their part in financing the economy as they lend very little money to SMEs, choosing instead to concentrate on low risk activities such as the purchase of sovereign bonds, although they have an excess of liquid assets.

The financial markets would therefore present the characteristics of a viable alternative for SMEs.

Finance specialist Seydina Tandian believes that financial markets bring international awareness to an SME, offering the company the possibility to leverage funds on the financial markets at a better cost than that offered by banks, the news source reports.

However, banks may not be the only ones at fault: SME credit applications to the Deposit and Consignment Fund (CDC) in Senegal are reported to be of poor quality.

This is according to Mamadou Falilou Mbacké Diagne, CDC's Chief Executive Officer, who urged SMEs to be more vigilant before submitting their application so that the CDC can support them in their search of finance, Reussir Business newspaper reports.