The Board of Governors of the African Development Bank Group (AfDB) through its private sector window approved on September 18, 2014 in Abidjan, Côte d'Ivoire a EUR 1 million line of credit (LOC) equivalent in Franc CFA to Finadev S.A. Benin.
Finadev Benin is a key microfinance and SME-finance institution with an important market share in Benin. It was established in 2001 as a microfinance branch of Financial Bank (currently OraBank) and became an independent MFI in 2009. Finadev Benin's key shareholder is Finadev Africa Holdings, which in turn was established through an investment by Emerging Capital Partners (ECP). After a restructuring during the 2008 and 2009 period it has re-established strongly in the local market as a key provider of finance for MSMEs. Finadev Benin offers a range of financial products and services to MSMEs and to individuals in the lower income strata. Finadev Benin has some 11 branches in key centres across the country and serves over 8,000 clients. Women are the main beneficiaries of Finadev loans.
Finadev will be scaling up by offering a complete range of services to its customers, and is expected to double its customer base over the coming few years. Finadev will focus primarily on the SME market which is still underserved in Benin, and the LoC of the AfDB will contribute to providing finance to SME businesses in a wide variety of sectors including but not limited to education, health, transport, wholesale, multimedia, agribusiness, restaurants and civil works. It is estimated that the LoC support from AfDB will support the financing of around 100 SMEs through Finadev's loan cycles, and may create an expected 500 direct jobs and contribute to the livelihoods of a further 1000 families. The AfDB LoC will also enable Finadev to provide longer term loans to its clients as needed to facilitate SME investments.
In addition to the LoC, the AfDB will also discuss with Finadev the possibility of Technical Assistance to strengthen Finadev's SME client management, to enhance its IT systems and to support its Environmental and Social Management System (ESMS).
Finadev S.A. Benin is part of the AfDB's Africa SME Program to develop and expand its SME financing activities and provide medium- to long-term financing options to local SMEs.
Approved by the AfDB's Board of Directors in July 2013, the Africa Small and Medium Enterprises (SME) Program is a four-year, US $125-million funding program combined with a US $3.98-million technical assistance package granted by the Fund for African Private Sector Assistance (FAPA), which aims to supporting micro, small and medium enterprises (MSMEs) in Africa. SME Program will provide the necessary longer term finance and a technical assistance package to address a number of constraints faced by around 25 target financial institutions and their SME clients across Africa.
Throughout its ongoing selection process, the SME Program will avail further longer-term resources to thousands of SMEs, including women and youth, thus contributing to job creation, poverty reduction and inclusive growth on the continent.
SOURCE African Development Bank (AfDB)
