The Moroccan banking group will benefit from partial coverage on 12,000 new loans to private companies- including at least 2,000 owned by women- in 10 African countries.
The International Finance Corporation (IFC) and Morocco’s Bank of Africa (BOA) recently signed a $77 million risk-sharing agreement, according to an announcement by the IFC. The financing will guarantee 50% of up to a $154 million loan granted by BOA.
With this coverage, BOA will extend 12,000 new loans, including at least 2,000 to women-owned businesses, in 10 countries where it operates, namely Benin, Burkina Faso, Côte d’Ivoire, Ghana, Madagascar, Mali, Niger, Senegal, Tanzania, and Togo. The loans will be granted mainly to companies operating in the agriculture, trade, energy, and construction sectors.
“We thank IFC’s initiative that will help BOA to boost our SMEs penetration with more strength and confidence,” said Amine Bouabid, CEO of BOA Group.
The risk-sharing agreement is announced five months after the IFC’s board of directors openly indicated that it was considering a $77 million guarantee for the Moroccan bank, which operates in 19 countries in West, East, and Central Africa.
The financing project announced in November 2022 was finally approved in early April 2023. It will build on a similar agreement, signed by the IFC and BOA in 2018, to support small businesses in eight African countries.
In the ten countries concerned by the new agreement, the SME financing gap is $21 billion. 53% of businesses operating in these countries have no or just partial access to credit, according to World Bank surveys reported by the IFC.
Meanwhile, in Sub-Saharan Africa, SMEs represent 90% of all businesses and generate 38% of the region’s GDP.