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The African Development Bank (AfDB) and VoLo signed on Friday, October 18 a grant agreement amounting to US $284,472 to facilitate financial inclusion and improve the efficiency of micro, small and medium-sized enterprises (MSMEs) financing in Senegal and The Gambia through the piloting of an innovative technology-based solution for collecting and disseminating credit information on MSMEs to prospective creditors. This innovative project will enhance the region’s financial structures by improving credit information, thereby ultimately fostering access to lending for local entrepreneurs.
VoLo is a privately-owned company registered in Senegal and The Gambia that seeks to improve financial inclusion and reduce poverty through the establishment of credit reference service providers that use VoLo’s Trust Information Platform, VoLo’s proprietary technology information platform. This technology ensures that information on individuals and firms is credible, up-to-date, independently verifiable, timely and accessible. VoLo’s unique systems and processes bind biographical, biometric, and credit data into one platform and a scalable database that analyzes information and provides a comprehensive and balanced score for MSMEs and individuals.
This grant, provided from the Fund for African Private Sector Assistance (FAPA), funded by the Government of Japan, the AfDB, the Austrian Development Bank and the Government of Austria, will finance the VoLo Senegal & The Gambia Trust Information and Credit Bureau Pilot. This technical assistance program will allow VoLo to produce a robust dataset supporting a commercially viable business plan for the establishment of a credit reference information provider in both countries while identifying and measuring the development impact of the VoLo’s Trust Information Platform technology in terms of greater access to finance by MSMEs.
At pilot stage, the beneficiaries would include 1,500 MSMEs and 700 individual entrepreneurs participating in the roll-out of the V-TIP technology to make their credit risk profile transparent, facilitating access to finance. Moreover, eight to 10 financial institutions, providing finance and trade insurance to those MSMEs will benefit from the program by enhancing their credit portfolio management through accessing high-quality credit information processed with broadly tested analytics. The AfDB will implement a throughout pilot project impact evaluation to demonstrate its commercial viability and developmental impact, in the perspective of replication of this program in other countries thereby increasing dramatically the potential beneficiaries while VoLo would scale up its operations.
The signing ceremony, held at the AfDB regional office in Senegal, was chaired by Leila Mokadem, AfDB Resident Representative in Senegal, and Draman Touray, VoLo Executive Chairman, in the presence of Akiko Takano, the Japanese Embassy First Secretary, and Gerhard Deiss, Ambassador for Austria.
Abdou Draman Touray, VoLo Executive Chairman, said: “The use of our VoLo Trust Information Platform (V-TIP) will enable financial firms to use objective and measurable criteria for extending credit. This will create a level playing field for all MSMEs and will enhance access to finance especially for women and youths.
Enhanced access to finance will in turn reduce poverty and increase access to other vital needs such as healthcare.”
Leila Mokadem, the AfDB’s Resident Representative, added: “By contributing to VoLo’s pioneering initiative, the AfDB, in line with the key pillars of its Ten-Year Strategy, aims at enhancing the inclusive growth in the region through a better access to finance for MSMEs, the core of Senegal and The Gambia private sector development. We would like to thank the governments of Japan and Austria for their financial support and we hope that this pilot project will be successful and will have the opportunity to be replicated throughout the continent.”
About the Fund for African Private Sector Assistance
The Fund for African Private Sector Assistance (FAPA) is a multi-donor thematic trust fund that provides grant funding for technical assistance and capacity building to support implementation of the Bank’s Private Sector Development Strategy. The Government of Japan, African Development Bank, the Austrian Development Bank and the Government of Austria are the contributors to the fund, which to date has provided US $42 million to 47 projects across the African continent. The FAPA portfolio includes regional and national projects in sectors such as Business Enabling Environment, Financial Intermediation, Infrastructure, Trade and Micro, Small and Medium Enterprises.