MICROCAPITAL BRIEF: IFC, Ecobank to Share Risk on $110m in Loans for Small, Medium-sized Enterprises (SMEs) in West, Central Africa

The International Finance Corporation (IFC), a member of the World Bank Group; and Ecobank Transnational Incorporated (Ecobank), a commercial bank based in Lome, Togo, with operations in 36 African countries, recently announced the launch of a risk-sharing credit facility in the amount of USD 110 million. The agreement is intended to increase access to finance for small and medium-sized enterprises (SMEs) in “fragile and conflict-affected states” [1] in West and Central Africa.

The credit facility will be available to Ecobank’s affiliates in Burundi, Chad, Côte d’Ivoire, Democratic Republic of the Congo, Guinea, Mali, Republic of Congo, and Togo. The participating countries have been selected because they are characterized by poverty, low employment rates, limited infrastructure, and security problems that disrupt business activity and increase the risk profile of lending to local SMEs. IFC and Ecobank will share the risk on a 50:50 basis.

Saran Kebet-Koulibaly, IFC’s director for West and Central Africa, said that “IFC places a strategic priority on promoting a sustainable architecture to improve access to finance and spur job creation in fragile and conflict-affected states”[1].

In April 2015, IFC also extended an emergency liquidity facility in response to the Ebola crisis through Ecobank’s affiliates in Guinea, Liberia and Sierra Leone.

As of year-end 2014, Ecobank reported USD 24.2 billion in assets, a total loan portfolio of approximately USD 12.3 billion, total equity of USD 2.7 billion, return on equity of 16.5 percent, return on assets of 1.7 percent, 10.8 million customers and 1,265 branches in 36 African countries.

As of year-end 2014, IFC reported total assets of USD 84.13 billion, net income of USD 1.48 billion, return on assets of 1.8 percent and a return of average capital of 6.4 percent.

By Victor Mugo, Research Associate.

About Ecobank Transnational Incorporated (Ecobank)

Incorporated in 1985 in Lome, Togo, Ecobank Transnational Incorporated (Ecobank)  provides wholesale, retail, investment and transaction banking services and products. As of year-end 2014, Ecobank reported USD 24.2 billion in assets, a total loan portfolio of approximately USD 12.3 billion, total equity of USD 2.7 billion, return on equity of 16.5 percent, return on assets of 1.7 percent, 10.8 million customers and 1,265 branches in 36 African countries.

About The International Finance Corporation (IFC)

The International Finance Corporation (IFC), a US-based multilateral development bank and member of the World Bank Group, offers loans, equity investments, advisory and risk mitigation services and technical assistance to private companies with the intent of alleviating poverty and promoting open and competitive markets in developing countries. As of 2014, IFC has 184 member countries that drive its policies and approve disbursements. As of year-end 2014, IFC reported total assets of USD 84.13 billion, net income of USD 1.48 billion, return on assets of 1.8 percent and a return of average capital of 6.4 percent.

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