Senior Business Reporter
THE African Development Bank (AfDB) has approved over $400 million to financial institutions across Africa for on-lending to small and medium enterprises (SMEs) across the continent.
The regional financier said it provides significant financial resources to reach SMEs including through its non-sovereign operations.
“In 2016 alone, the AfDB board of directors approved over $400 million in new lending to financial institutions for Africa’s SMEs.
“The funding is expected to help SMEs access new loans, enabling them to invest in expanding their productivity capacity and ultimately to grow their business, increase their revenues, create new jobs and play a key role in Africa’s inclusive growth story,” said AfDB.
The regional financier said during a Technical Assistance Learning Forum in Abidjan hosted by its financial institutions and inclusion division recently, it was noted that financing was only one component of what was required to support Africa’s SMEs.
It said delegates at the meeting highlighted that apart from provision of funding, a lot still needed to be done to assist SMEs boost their operations.
In 2013, AfDB launched the Africa SME Programme under a $125 million envelope to provide smaller, local financial institutions with financial resources and technical assistance.
The Fund for Africa Private Sector Assistance (FAPA) provided generous support through a grant to support co-financing of technical assistance and capacity building programmes.
“So far, in partnership with the Frankfurt School of Finance and Management, and with the funding from FAPA, technical assistance needs assessments have been undertaken with 14 different institutions spread across 12 different countries in Africa.
“Full technical assistance programmes have been provided to seven institutions in three languages —Portuguese, French and English,” it said.
At the recent learning forum, participants discussed approaches to identify technical assistance including through the analysis of strengths, weaknesses, opportunities and threats.
They also looked at key areas for technical assistance such as SME market and business strategies, risk management, information technology and mobile banking and environmental and social management systems.
The learning forum comes at a time when AfDB was operationalising its High 5 priorities and seeking to expand its ‘on-the-ground’ presence.