Orabank Receives 40 Million Euros from ICD for SME Financing

SME business owner Joanne Kisten stands in front of her stall, holding her pickles and fried nuts

Lomé, Togo, March 14, 2018 – ORAGROUP, the holding company of the African banking group ORABANK, announced that it has received EUR 40 million to finance Small and Medium Enterprises (SMEs) in Africa.

This  follows the signing of a financing agreement with the Islamic Corporation for the Development of the Private Sector (ICD) in December 2017.

These funds will enable Oragroup, through its subsidiares Orabank Togo, Orabank Gabon and Orabank Côte d’Ivoire (as well as Orabank Côte d’Ivoire branches in Burkina Faso, in Guinea Bissau, in Mali, in Niger and in Senegal), to finance, with the benefit of exclusivity, eligible projects from SMEs operating in member countries of the ICD.

The agreement takes the form of a’ Wakala’ contract between the ICD and each of the selected subsidiaries. ‘Wakala’ contract is an an agency agreement under which ICD will designate the Oragroup Subsidiaries to receive the financing as agent to act in its name and on its behalf under the Eligible Business Financing Program.

“Thanks to this new financing capacity, we will significantly increase our impact on the economic development of the region through job creation, local transformation leading to greater industrialization and value creation, as well as wealth redistribution… SMEs are the key to inclusive growth and African economic take-off, yet they are for now underfunded by traditional banks.

This program with the ICD will allow us to take another step to reach greater financial inclusion,”  Binta Touré Ndoye, CEO of Oragroup said.

“We are pleased to start this partnership with Oragroup, a pan-African banking group that has developed real expertise to monitor and assess the risks associated with SME financing. It is also because we share the same convictions that we are proud of working with them.

Financing the private sector in Africa is an unparalleled path to shared prosperity through wealth and jobs creation. We will continue to support the lenders that will enable the economic diversification and, ultimately, the industrialization of the continent,” Salah Babale, Division Manager, Development Department of Financial Institutions at the ICD added.

African SMEs represent 90% of the continent’s private companies. 70 to 80% of them are micro or very small businesses. But this widespread presence is not yet reflected in their weight in the economy.

It is estimated that SMEs represent between 20 and 30% of the GDP of African countries against about 60% in developed countries. Yet, if they were allowed to grow thanks to innovative financing tools, African SMEs could hold the key to employment, especially in rural areas where they are behind 70% of jobs creations.

Only 6.4% of sub-Saharan SMEs report having access to bank financing. This compares to 27% in South-East Asia.

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