The aim of this financing facility is to partially guarantee the portfolio through banking and microfinance institutions.
The Competitive Value Chains for Employment and Economic Transformation (PCCET) project will provide CFA 6 billion to the SME Credit Guarantee Company (SGPME). An agreement to that effect was signed on Tuesday 12 June 2024 between these two entities.
According to the CCPET coordinator, Mr Arthur Coulibaly, this partial portfolio guarantee fund will be managed by the SGPME.
The objective is to set up this fund and enable it to provide financial guarantees to partner institutions for the benefit of SMEs.
This fund will enable banks and microfinance institutions to provide more guarantees to small and medium-sized enterprises (SMEs), explained Mr Arthur Coulibaly during the signing of the agreement at the PCCET headquarters in Abidjan.
“With this support, the banks will in turn be able to grant more loans, more loans or a higher volume of loans,” he added, indicating that the issue of interest rates is a “prerogative of the banks”.
However, “when a bank receives a partial guarantee, be it 50 percent or more, it strengthens the credit status of the borrower”, he explained, stressing that the aim is to ensure that banks lend more to SMEs.
Joëlle Kouassi, Director General of the SME Credit Guarantee Company (SGPME), explained that this structure is a financial institution with the characteristics of a bank, created by the Cote d’Ivoire state in its vision to support SMEs and facilitate their access to finance.
This “additional 6 billion CFA francs will allow us to sign more agreements with banking institutions and microfinance institutions so that they can grant more loans and a greater volume of loans to SMEs,” she said.
Ms. Kouassi also stressed that “our mandate covers SMEs and intermediaries with a turnover of up to CFAF 3 billion”. To be eligible for this fund, however, the candidate must be legally constituted.
To benefit from this financing, candidates have to be a structured company, have an account at a banking institution or a microcredit partner of the SGPME and meet the credit requirements, she said.
“For example, for an SME that asks for 100 million CFA francs, we (SGPME) bear 50 percent of the risk,” she said, adding that “this match will allow us to do at least twice as much in terms of credit support”.
“The partial portfolio fund is a silent fund. The SME that benefits does not necessarily know that it is registered under the guarantee”, Kouassi said on the occasion of the signing of the agreement.
The agreement is in line with one of the objectives of the PCCET, which is to provide financing to SMEs to enable them to be more competitive, create more jobs and generate more income, thus contributing to the economic growth and development of the country.
AP/lb/as/APA