Abidjan, Cote d’Ivoire, March 22, 2016—IFC,
a member of the World Bank Group, the European Investment Bank (EIB) and
Ecobank Transnational Incorporated (ETI), parent company of the Ecobank
Group and leading pan-African full-service banking group, today signed
a landmark risk-sharing agreement that will help fill the gap in financing
for small and medium sized enterprises in some of Sub-Saharan Africa’s
poorest and most fragile countries.
Under the agreement, EIB, which is already
a key partner in IFC’s Global SME Finance Facility, will join IFC’s existing
risk-sharing facility with ETI. The two institutions launched that facility
in May 2015. EIB and IFC will share 25 percent of the risk in the $110
million facility, alongside ETI. The facility is designed to overcome the
challenges of lending to smaller businesses which have a higher risk profile.
Speaking at the sidelines of 2016 Africa
CEO Forum in Abidjan, IFC’s Director for Western and Central Africa Vera
Songwe said “SMEs in Africa face a huge funding gap, and partnerships
like this between IFC, EIB and ETI are critical to helping these SMEs and
economies 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 than a single IFI, DFI or donor
can on its own.”
Ambroise Fayolle, Vice President, EIB, said
“As the EU bank, the European Investment Bank is strongly committed to
supporting private sector investment in Africa. The new agreement
signed today will directly benefit SMEs across Sub-Saharan Africa, including
in Côte d’Ivoire, fostering sustainable development and job creation.
Every year, the European Investment Bank invests Euro 2.5 billions in Africa
to enhance access to finance for SMEs and micro-enterprises, to develop
social and much needed economic infrastructures, and to promote climate
Ade Ayeyemi, Group Chief Executive Officer
of Ecobank, said “This agreement buttresses our continued commitment at
Ecobank to supporting small and medium scale enterprises in Africa. Their
financing and growth is an important part of the development of the private
sector in Africa and the overall growth of our economies.””
The risk-sharing facility agreement signed today will see IFC, EIB and
EIB collaborate in countries where more than 50 percent of the population
live in poverty, unemployment is high and infrastructure is poor, which
exacerbat the operating conditions for smaller businesses. The facility
will target SMEs in Burundi, Chad, Côte d’Ivoire, Democratic Republic
of the Congo, Guinea, Mali and Togo.
IFC and Ecobank enjoy a long-standing collaboration
dating back to 1993. ETI’s unparalleled network across Africa has helped
extend financial access in difficult environments at a scale that few other
IFC-partner financial institutions can match.
The EIB is the long-term lending arm of the
EU and a key IFC partner. IFC and EIB co-invest in many projects around
the world and developed a particularly strong partnership during the 2008
financial crisis. EIB contributed $100 million to the Global SME Finance
Facility in 2014, with the particular objective of targeting SMEs in Africa.
The Global SME Finance Facility is a blended
finance vehicle which integrates both investment and advisory services
to help banks reach more SMEs, launched in April 2012 in response to a
call from the G-20 to bridge the trillion dollar SME financing gap. The
Facility is truly unique as it mobilizes funding from donors, international
finance institutions and the private sector, to help banks de-risk and
scale up SME lending. The facility targets SMEs that don’t have access
to finance, including women-owned SMEs, agriculture and climate-related
businesses and those in fragile states.
The facility has a wide geographic focus covering
all IDA countries, and has already committed to 92 projects in 27 countries,
15 of which are classified as fragile and conflict affected states. By
the end of December 2015, the facility had already made more than 100,000
SME loans, worth a total of $6,4 billion. Its unique structure has allowed
it to make some life-changing investments. The United Kingdom’s Department
for International Development (DFID) was the facility’s first partner,
with a $120 million contribution to both advisory services and blended
finance. Since then, IFC has committed $595 million to projects under the
Facility, up from its original commitment of $200 million.
IFC, a member of the World Bank Group, is
the largest global development institution focused on the private sector
in emerging markets. Working with more than 2,000 businesses worldwide,
we use our capital, expertise, and influence, to create opportunity where
it’s needed most. In FY15, our long-term investments in developing countries
rose to nearly $18 billion, helping the private sector play an essential
role in the global effort to end extreme poverty and boost shared prosperity.
For more information, visit www.ifc.org.
Incorporated in Lomé, Togo, Ecobank Transnational Incorporated (‘ETI’)
is the parent company of the leading independent pan-African banking group,
Ecobank. It currently has a presence in 36 African countries: Angola, Benin,
Burkina Faso, Burundi, Cameroon, Cape Verde, Central African Republic,
Chad, Congo (Brazzaville), Congo (Democratic Republic), Côte d’Ivoire,
Equatorial Guinea, Ethiopia, Gabon, Gambia, Ghana, Guinea, Guinea Bissau,
Kenya, Liberia, Malawi, Mali, Mozambique, Niger, Nigeria, Rwanda, Sao Tome
and Principe, Senegal, Sierra Leone, South Africa, South Sudan, Tanzania,
Togo, Uganda, Zambia and Zimbabwe. The Group employs over 20,000 people
in 40 different countries in over 1,200 branches and offices. Ecobank is
a full-service bank providing wholesale, retail, investment and transaction
banking services and products to governments, financial institutions, multinationals,
international organizations, medium, small and micro businesses and individuals.
More information can be found on the Group's website: ecobank.com
or on Twitter: @GroupEcobank
About the European Investment Bank
The European Investment Bank (EIB) is the
long-term lending institution of the European Union owned by its Member
States. It makes long-term finance available for sound investment in order
to contribute towards EU policy goals.
Follow us on Twitter @eib