The West Africa (WA) SME Program is an integrated program with trade finance and trade development capacity building components, designed to offset the trade finance gap for SMEs and facilitate access to finance.
The WA SME Program aims to have a positive impact both on banks and SMEs alike. For Banks, it will increase the offering of trade finance products, provide training and SMEs assessment tools to start or strengthen their SMEs lending practices. For SMEs, it will substantially increase the access to financing and build their capacity to decrease default rate on Bank loans.
The partnership between multilateral, private and public sector actors to propose various financing instruments resulted in the increase of the financing envelopes and reduced the cost of financing for SMEs. This included loans, equity guarantees and technical assistance grants.
Along with ITFC, partners include the Organization International de la Francophonie (OIF), the Délégation Générale à l’Entreprenariat Rapide - DER (Government of Senegal) and Coris Bank. About 200 multisector Senegalese SMEs will be selected in phases (2020 and 2021), including at least 40 SMEs led by women (20% of total SMEs), will participate in a 15-month long program that will include pre-and-post- financing support consisting of technical assistance to project preparation, submission of loan applications and post financing project follow up.
In the context of COVID-19, the project was repositioned to give priority to SMEs directly or indirectly involved in health care (digital health services, pharmacy, supply and logistic of health products, import of health products) and sectors that mitigate constraints created by interruptions of schools and closure of stores (including agroindustry and education). The combination of different financial instruments and technical assistance will help increase the financing volume at limited risk for banks and lower cost for SMEs. As of October 2021, nearly 80 SMEs were assessed by the program partners. The SMEs are trained in working capital management techniques and crisis management, which allows them to mitigate the impacts of the crisis.
Regarding the banking component, a capacity building program was provided to support its partner banks in the region. The German consulting firm, International Project Consult GmbH, was selected to carry out an institutional diagnostic of Coris Bank International Burkina Faso and Coris Bank International Senegal on the banks’ SME finance operations, in particular SME trade finance, to propose an implementation plan to enhance lending operations with SME and to proceed with the implementation subsequently. The project work started in March 2020 and was finalized in December 2020. The IPC experts thoroughly assessed both banks’ current procedural set-up, staff competencies and, hence, technical assistance needs in order to deliver efficient and profitable financial services and products to the SME segments in Burkina Faso and Senegal. On that basis, the IPC experts delivered a new SME finance-centered manual of lending policy and procedures, and together with it, templates and tools supporting bank staff and managers in the entire SME credit cycle. This package includes a scoring tool as well enhancing the SME loan demand appraisal and the credit risk analysis. The IPC experts concluded the implementation activities with a series of interactive webinar training sessions with business and risk staff of both partner institutions. Training topics included SME business development techniques, financial analysis, and credit risk assessment. The project work has been implemented successfully by the IPC experts to full satisfaction of ITFC and the partner banks.
La Maison de L'Entreprise du Burkina Faso
Coris Bank International Burkina Faso
Coris Bank International Senegal