AFRICA SME PROGRAM - INCLUSIVE GROWTH AND JOB CREATION
- Reference: P-Z1-KB0-007
- Approval date: 22/07/2013
- Start date: 22/07/2013
- Appraisal Date: 26/06/2013
- Status: OngoingOnGo
- Implementing Agency: AFRICAN DEVELOPMENT BANK
- Location: All over Africa
2.1 Program Description
The Program aims to establish a USD 5.4 mln Technical Assistance (TA) Program Component, with FAPA being requested to provide a TA grant of USD 3.98 mln, to support the implementation of a (conjunctly proposed) USD 125 mln SME lending Program Component aimed at strengthening the SME related financing sector in Africa. The TA Component of the Program will enhance lending capacity of up to 25 small sized FIs and MFIs, primarily in LIC / ADF countries, spread over all 5 regions in Africa.
2.2 Project Development Outcomes
Outcome 1: Improved Financial Sector SME (Credit) Risk Management and Product Development in Targeted FIs: The Program will help African FIs
(i) improve their internal systems, people skills and ultimately loan book quality;
(ii) create new products for this market segment and scale up their lending activities;
(iii) develop a more inclusive approach to customer relationship management;
(iv) develop appropriate long term products targeted at SMEs.
The training programs to be offered under the TA component will assist the benefiting FIs to improve staff skills. The program envisages that training be offered in SME Customer Relationship Management, SME Credit Appraisal, SME Project (Term) Financing, Loan Monitoring, ESMS Implementation, etc. which will improve the overall banking skills capacity with the RMCs in which the FIs operate.
Overall, the TA component will improve the performance of the eligible FIs including banks, MFIs and NBFIs and will strengthen the financial sector in RMCs.
Outcome 2: Improved Access to Finance for Africa
Rationale for Bank
Target Beneficiaries The beneficiaries are 20 to 25 SME focused FIs who will receive support under the Africa SME Program. The exact number will largely depend on the LOC component of the program. An initial approximate 5 FIs (including some Tier 2/3 banks, MFIs and a Leasing company), have been processed for possible inclusion under the first phase of the Africa SME funding program. Of these FIs, the majority will require substantial TA with only one or two requiring limited support. The FIs are selected based on a range of qualifying criteria as detailed in the Program
COULIBALY M'Para Issouf - PISD2