The partnership will enhance local Micro-, Small- and Medium-sized Enterprises’ access to much needed credit for business growth, help create jobs and address the gender finance gap.
At least 30 percent of the proceeds will be directed towards women-owned or -led businesses.
British International Investment (BII), the UK development finance institution (DFI) and impact investor, has committed a senior loan of €14 million to COFINA Côte d’Ivoire, a specialist meso-finance lender, to support the growth of Micro-, Small- and Medium-sized Enterprises (MSMEs) and advance gender finance.
The commitment will enable COFINA to provide additional loans in the next three years to MSMEs in Cote d’Ivoire. COFINA is well placed to provide meso-finance, which means providing financing to the “missing middle” – SMEs too small to be serviced by banks and too large for microfinance providers.
As the economic engine of Francophone West Africa, Côte d’Ivoire’s SMEs represent over 20 per cent of GDP and employ around 23 per cent of the working population. However, according to the latest available World Bank Enterprise Survey data, nearly three quarters of firms surveyed in Côte d'Ivoire identified access to finance as a major constraint for their business. This is significantly higher than the 38 percent average for Sub-Saharan Africa.
Female business owners face further challenges as the size of their businesses tend to be smaller versus male counterparts. The finance gap also increases as their business grows. For example, for women microenterprises to grow into a SME size, the gender finance gap jumps from 10 per cent to 58 per cent. This illustrates the importance of lenders like COFINA to pay closer attention to meso-finance for women.
Sié Amed TOURE, Managing Director of COFINA Côte d'Ivoire, commented: “We are delighted to have reached this financing agreement with BII which will strengthen our role as a meso-finance institution promoting financial inclusion, particularly for women entrepreneurs. By facilitating access to financing for MSMEs, we are pursuing our mission of creating more value for our partners and continuing to participate sustainably in the development of our continent.”
Stephen Priestley, Managing Director and Head of Financial Services for BII, said: “Inclusion is a priority for BII, and in particular improving access to finance for underserved groups. We have seen the benefits of improved financial inclusion on bolstering economic development because it enables more people with access to economic opportunities.
“We are delighted to partner with COFINA which is focused on financing those SMEs that too small to be served by banks, and on delivering our shared ambitions to empower underserved groups including women and celebrate entrepreneurship in Côte d’Ivoire. This marks our first direct financial services transaction in Francophone West Africa and we look forward to scaling our investments in the region.”
The transaction supports United Nations Sustainable Development Goals on Gender Equity (SDG5) and Decent Work and Economic Growth (SDG8). It also qualifies under 2X Challenge, a global initiative BII co-founded to mobilise capital for women’s economic empowerment.