Senegal: New credit offer launched for very small enterprises

Mar 28, 2012

A grant agreement of €250,000 has been signed between the French Development Agency (AFD) and the private bank Société générale de banques au Sénégal to introduce a new credit offer for financing very small enterprises (VSE) in Senegal.

A grant agreement of €250,000 has been signed between the French Development Agency (AFD) and the private bank Société générale de banques au Sénégal to introduce a new credit offer for financing very small enterprises (VSE) in Senegal.

According to the AFD, the agreement targets farmers, craftsmen, liberal professions, small traders and VSEs with a turnover of less than CFAF 500,000 (€762).

This partnership with the AFD will allow the bank to better assess the needs of this clientele and strengthen its human resources, analysis tools and products capacity to cope with demand, Le Soleil newspaper reports.

The institution wants to achieve a 50 percent increase in the volume of credit granted to Senegalese VSEs by 2016.

According to a report from the NGO Epargne Sans Frontière called Travaux du groupe de réflexion sur la mésofinance au Sénégal, SMEs represent 80 to 90 percent of the economical network of the country.

These enterprises struggle to access credit because of their low capital stock and due to the need for them to provide guarantees, usually physical, that many companies do not have.

In order to increase access to credit for VSEs, the report recommends providing technical assistance and financial training to these companies, as well as the introduction of an adapted guaranty fund.

The report also recommends the development of new financial products, such as capital risk, credit insurance and the introduction of refinancing lines at concessional rates.ADNFCR-2976-ID-801327886-ADNFCR