Two US development support organizations and a Dutch company have announced an initiative to improve microfinance in ECOWAS. SMEs and enterprises run by women are the main target.

An opportunity to access $37 million in financing has been set up for the benefit of small and medium-sized enterprises in 4 ECOWAS countries, including Burkina Faso, Mali, Guinea and Sierra Leone.

It is the result of a partnership between the US International Development Finance Corporation (DFC), the American development finance institution and the West Africa Trade & Investment Hub, funded by USAID, the American cooperation agency. The two organizations have co-invested in this project with Stichting Cordaid (Cordaid), a subsidiary of the Dutch group Cordaid Investment Management (CIM).

“We are delighted with this partnership, and look forward to their catalytic effect on the economy of these countries by attracting private capital and creating jobs, especially for SMEs struggling to survive in the most fragile economies. in West Africa, and for which access to funding is very limited," said Michael Clements, project leader.

The initiative is announced in a context where African governments, despite their efforts, are still struggling to find sustainable solutions to support their SMEs, which are nevertheless providers of jobs and activities for many young people. The DFC will provide a guarantee of $14.75 million on the basis of which the desired resources will be mobilized. In total, nearly $18 million have already been mobilized.

According to a recent report by the BCEAO, the WAEMU Central Bank, the outstanding loans of microfinance structures in the sub-region at the end of June 2020 (1505 billion FCFA) increased by 5.1% compared to at its level for the same period in 2019.

In absolute value, this represents an increase of only about 75 billion FCFA. The Trade Hub project will also provide access to more long-term credit and at least 30% credit to women against 21% still, according to the analysis note of the WAEMU Central Bank.

Idriss Linen