FinDev Canada announced a $20 million loan to Ecobank Transnational Incorporated, the parent company of the Ecobank Group, to strengthen its digital finance operations and help small and medium-sized enterprises (SMEs) in Africa to grow, maintain or create jobs as they build prosperity.
At least half of the loan will be used in low income countries within the Ecobank Group, with 30% of the total amount reserved for women-owned or managed businesses.
“FinDev Canada is proud to partner with Ecobank, which has demonstrated its effectiveness in supporting the SME sector in Africa,” said Paulo Martelli, Chief Investment Officer of FinDev Canada. “In particular, it has helped these companies to weather the fallout of the COVID-19 pandemic by expanding SME-focused lines of credit. We are joining other Development Finance Institutions to support Ecobank as it continues to catalyze funding for the resilience and growth of SMEs in Africa.”
SMEs make up about 90% of businesses in Africa yet they struggle to find affordable financing to grow. There is an estimated US$ 136 billion gap between what SMEs need in credit and what the market can offer. Ecobank has a strong presence among these businesses, with more than 800,000 of them as clients. Ecobank was recently named the ‘2021 SME Bank of the Year’ by the African Banker Awards.
Ade Ayeyemi, Ecobank Group CEO said, “Ecobank is pleased to have entered into this $20 million transaction with FinDev Canada which will help in our unrelenting focus on growing SMEs, the life blood of economies across our continent. The loan will also further support our continued partnerships with African fintechs in bringing innovative digital services to even more customers. We express appreciation to FinDev Canada for supporting Africa and its development.”
With over 13,000 employees in about 700 branch locations across the continent, Ecobank has a large footprint in terms of market presence and the impact on local economies. The FinDev Canada loan will also support Ecobank in working with African fintech firms to reinforce its digital services and expand its offerings. This will help to improve banking services and access to credit for SMEs as well as increase financial inclusion for millions of people across Sub-Saharan Africa.
At least half of the women-owned or led SMEs in Ecobank’s five largest markets have only limited access to credit. With 30% of the FinDev Canada’s loan dedicated to supporting these companies, this under-served population will get a significant boost. Along with internal policies and programs to provide quality employment to women across Ecobank, this makes the loan eligible to qualify for the 2X Challenge.