The Global Coalition on Financing for Development commits more than $5.5 billion for financing micro, small and medium-sized enterprises (MSMEs) in Africa
the coalition for a sustainable and inclusive recovery of the private sector ( https://bit.ly/3oV8zOV), an international group of 20 development finance institutions meeting in 2020, today announced funding commitments of over US$5.55 billion to small and medium-sized enterprises (MSMEs) in Africa between mid-2020 and end of 2021, exceeding their set target of $4 billion over the period.
Document to download: https://bit.ly/3uVADp1
The coalition said it exceeded its initial target of 40%, while DFIs jointly committed more than $5.55 billion in financing to MSMEs in Africa during the period.
During the first Finance in Common Summit in November 2020, the EDFI association, on behalf of its 15 European member development finance institutions (DFIs), in collaboration with the African Development Bank (AfDB), the West African Bank of (BOAD), FinDev Canada, the US International Development Finance Corporation (US DFC) and the Islamic Corporation for Private Sector Development (ICD) launched the coalition. The Trade and Development Bank (TDB) joined soon after.
In response to the unprecedented global health and economic crisis caused by Covid-19, the coalition recognized the critical role DFIs play in supporting crisis response in vulnerable countries.
While MSMEs are the economic engine of emerging and frontier economies, they are also more vulnerable to crises than large corporations. In developing countries, formal SMEs contribute more than a third of gross domestic product and account for 52% of formal employment.
Improving access to finance for MSMEs is critically important to boosting the growth and prospects of the 450 million young Africans who are expected to join the labor market by 2050. The Covid-19 crisis has put the viability of MSMEs under severe pressure and efforts to scale up inclusive financial solutions are crucial for a successful recovery.
To meet this challenge, the signatories of the coalition have pledged to: deepen cooperation between their institutions; focus on inclusive financial solutions for the private sector; and supporting customers with technical assistance and consulting services when needed. Therefore, the 1,400 contracted projects demonstrate a strong focus on smaller and inclusive projects as well as a wide range of SMEs, from small businesses/start-ups to medium-sized companies with high growth potential. In addition, the signatories mobilized €23 million in technical assistance, including capacity building and advisory services to MSMEs.
President of the African Development Bank Akinwumi Adesina noted: “Micro, small and medium-sized enterprises are essential to Africa’s prosperity, representing 90% of all businesses and generating more than half of all jobs. Many small entrepreneurs will tell you that limited access to finance is a major barrier to growth. The $5.5 billion we are committing together will go a long way to overcoming this hurdle. I am confident that our initiative will make a major contribution to the success of micro, small and medium enterprises across Africa. If they grow up, we all do.
“MSMEs are vital to the economy of sub-Saharan Africa, accounting for 90% of trade and more than half of jobs in the region. As these companies have disproportionately suffered the effects of the health crisis, we have joined forces to provide capital and advisory services to support economic recovery. Exceeding our initial goal further motivates us to work with our partners to promote sustainable and inclusive economic growth in sub-Saharan Africa.,” added Lori KerrCEO, FinDev Canada.
Ayman Sejiny, CEO of ICD, said: “I would like to commend all coalition partners and the DCI team for surpassing the coalition target by committing over $5 billion for financing MSMEs in Africa. This is a great achievement and a culmination that will inspire our coalition of development partners to collaborate further to continue to achieve more ambitious sustainable development goals in Africa and our member countries.
“The impressive results of this coalition demonstrate the kind of collaboration between DFIs that is needed to support private sector enterprises in Africa. European DFIs have increased SME financing to an all-time high in 2021. While this progress represents an important milestone for us, it is by working with African and international partner institutions that we can mobilize finance at the scale needed. to ensure an inclusive economic recovery,” concluded Soren Peter AndreasenCEO of EDFI.
Distributed by APO Group on behalf of the Islamic Corporation for Private Sector Development (ICD).
- African Development BankAmba Mpoke-Bigg – Communication and External Relations Department: [email protected]
- FinDev Canada: Angela Rodriguez – Head of Marketing and Communications: [email protected]
- ICD: Nabil El-Alami – Head of Marketing and Corporate Communication: [email protected]
- EDFI: Mathilde Poncelet – Communications Officer: [email protected]
About the coalition for a sustainable and inclusive recovery of the private sector:
The coalition’s 20 signatory development finance institutions are focused on investing in vulnerable countries where COVID-19 has undermined decades of achievements in private sector development, job creation and poverty reduction. Poverty Signatories collectively hold a portfolio of nearly $90 billion in private sector operations in low- and middle-income countries, supporting more than 12 million direct jobs, more than 40% of them in Africa.
The petitioners :
- ADB (www.AfDB.org) – African development bank
- ADB (www.BOAD.org)- West African Development Bank
- DFC (www.DFC.gov)- American Development Finance Corporation
- FinDev Canada (www.FinDevCanada.ca)- Development Finance Institute Canada
- CIM (https://ICD-ps.org)- Islamic Corporation for Private Sector Development
- TDB (www.TDBgroup.org)- Trade and Development Bank
- EDFI (www.EDFI.eu)– the Association of European Development Finance Institutions on behalf of all of its member institutions: BIO (Belgium), CDC (United Kingdom), Cofides (Spain), DEG (Germany), Finnfund (Finland), FMO (Netherlands), IFU (Denmark), Norfund (Norway), OeEB (Austria), Proparco (France), Sifem (Switzerland), Simest/CDP development finance (Italy), Sofid (Portugal), Swedfund (Sweden).
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