To support the growth of micro, small and medium enterprises (MSMEs) in the Democratic Republic of the Congo (DRC), IFC today announced a partnership with Equity Banque Commerciale du Congo (Equity BCDC), a subsidiary of Equity Group, that will help these smaller businesses access local currency financing.
IFC's loan to Equity BCDC, of up to the equivalent of US$50 million in Congolese francs, will help the bank provide additional local currency loans to underserved MSMEs in the DRC, many of which have suffered cash-flow disruptions because of the COVID19 pandemic. Providing loans in local Congolese francs will help borrowing companies in the country avoid currency fluctuations.
"Our strong relationship with IFC has today taken a new step as we commit to supporting MSMEs in the DRC together. The DRC is a vast, dynamic country that is on its way to becoming a dynamic economy with tremendous opportunities for small businesses to underpin growth. Our shared vision for the transformation of lives and livelihoods in the DRC and the African continent is one we greatly value and which will allow the DRC to thrive and prosper in the post-Covid economy as we seek to implement Equity's post Covid Africa resilience and growth plan," said Dr. James Mwangi, Managing Director and CEO of Equity Group Holdings Plc.
"We want to see continued progress for our MSMEs as the world opens up. By working together with partners such as IFC, we are offering our clients a way to empower themselves while creating economic opportunities for wealth creation for our people," Dr. Mwangi continued.
"Helping smaller businesses access financing—especially local currency financing—is one of the best ways to help them grow and create jobs and is a central part of IFC's strategy to support development in Africa," said Sérgio Pimenta, IFC's Vice President for Africa. "Our investment in Equity BCDC will help smaller businesses in the DRC access the financing they need and reinforces our longstanding partnership with Equity Group."
IFC's investment is supported by the International Development Association's (IDA) Private Sector Window (PSW) Blended Finance Facility and Local Currency Facility, through guarantees and cross-currency swaps aimed at helping financial service providers serving the base of the pyramid segment.
Equity BCDC, the second largest private sector bank with a strategic focus on serving MSMEs in the DRC, is part of Equity Group Holdings Limited (EGHL), the biggest bank by asset base in East and Central Africa.
EGHL is an important partner for IFC in East & Central Africa where the group is present in seven countries and serves more than 14 million customers. EGHL's strategy targets underserved low-income segments of society, especially farmers, women entrepreneurs and rural populations. The Group's Africa post COVID-19 recovery and resilience plan aims to lend $4 billion to five million MSMEs to create up to 50 million jobs in the region by 2025.
In fiscal year 21, IFC's committed SME Finance portfolio was over $12.3 billion worldwide. Of this amount, the Africa portfolio was $2.6 billion. IFC's strategic priorities in the DRC focus on energy, ICT, housing, access to finance for MSMEs, and supporting improvements to the business enabling environment.
This article was originally published by IFC.