Abidjan, March 29, 2018// – Compagnie Financiere Africaine Group (COFINA), Africa’s leading institution for microfinance, announced a strategic partnership with Mediterrania Capital Partners, a private equity fund dedicated to business growth in Africa.
This minority stake’s agreement, signed together with technical assistance, will enable COFINA to raise up to 50 million euros in equity and debt over the next three years.
Thanks to this new deal COFINA will strengthen its ability to finance its customers and accelerate its regional development, with four new subsidiaries to open in West and Central Africa by 2021.
The arrival of Mediterrania Capital Partners among COFINA’s stakeholders will allow both for consolidation of the Group’s finances and increase of its available funds to finance entrepreneurs.
COFINA’s financing goes to the “missing link”, in particular to micro-businesses and SMEs that have difficulty accessing medium / long-term financing (more than 70% of companies in Africa according to the African Development Bank).
Many existing financial institutions do not have adequate knowledge or systems to evaluate and monitor SME projects, which they compensate for by demanding very expensive guarantees.
Microfinance supports SMEs’ entrepreneurs or managers whose financing needs have become too important for microfinance institutions, but whose entrepreneurial structure is still considered insufficiently formal for traditional commercial banks. Only 6.4% of sub-Saharan African SMEs report having access to finance compared to 27% in Southeast Asia.
“After a first expansion phase, the signing of this partnership with Mediterrania Capital marks a new stage in the development of our group in a very promising market. In Africa, credit to the private sector accounts for less than 20 percent of GDP, compared to 30 percent in South Asia and 40 percent in Latin America.
Despite their immense potential, the markets in which we operate, while showing no lack of talented entrepreneurs, are very poorly served by traditional banks,” says Jean-Luc Konan, founder of COFINA.
“Mediterrania is proud to contribute to the development of COFINA business model. This African success story has succeeded in establishing itself in a key sector and claiming a leading position in five African countries.
We hope that the new phase of expansion in which we will engage will increase COFINA’s profitability and make it a model for all other players in the sector,” said Albert Alsina, CEO of Mediterrania Capital Partners.
African Eye Report
