IFC, the private sector arm of the World Bank Group, has signed a partnership agreement with two consulting firms to provide advisory services and capacity building to financial institutions in Africa.
The partnership with Credit Agricole Consultants based in France and Environmental Quality International based in Egypt is part of a recently announced US$200mn integrated investment and advisory services initiative, the Africa Micro, Small and Medium Enterprise Finance Program.
Through the programme, IFC will boost lending to smaller businesses across Sub-Saharan Africa by investing in and providing capacity building to banks in the region.
IFC is considering investing in 25 banks in 17 countries across Africa in the first round of the programme. Each investment will be made with an extensive package of advisory services that aims to raise the capacity of the partner banks to serve smaller enterprises.
These services will be provided by IFC-selected consulting companies with expertise in promoting lending to smaller firms.
“Financial institutions in Africa are recognising that smaller businesses are a market opportunity,” says Lars Thunell, head of IFC. “By working with international consulting firms experienced in small and medium enterprise finance, IFC is helping local banks meet the financing needs of smaller businesses.”
Crdit Agricole and Environmental Quality International are the first consultants to be contracted under this initiative. The two firms will provide support to Banque Agricole Commerciale du Burkina, the first financial institution in Africa to benefit from the program. The bank, which is one of the leading financial institutions in Burkina Faso, recently signed a US$6mn loan with IFC.
The consultants will implement a two-year advisory services programme for Bank Agricole Commerciale du Burkina, which will focus on helping the bank to increase its coverage, expand its product offerings, especially in the small business segment, and improve overall banking standards and practices, in areas such as credit risk management.
“Crdit Agricole Consultants has a track record of developing SME focused products in emerging markets,” adds Jean-Luc Perron, vice-president, European affairs, Crdit Agricole. “We are delighted to extend our partnership with IFC and to lend our considerable banking advisory expertise for the benefit of financial institutions in Africa.”
“Our group has more than 20 years experience in supporting microfinance institutions in Africa and the Middle East. We are happy to partner with Crdit Agricole and IFC to provide joint support to the first selected financial institution under the IFC Africa MSME programme,” says Mounir Neamatalla, chairman, Environmental Quality International.