BY BAMIDELE FAMOOFO
The coalition for a sustainable and inclusive recovery of the private sector, an international group of 20 development finance institutions that came together in 2020, has committed over $5.55 billion of financing to micro, small and medium enterprises in Africa between mid-2020 and end of 2021, beating their set target of $4 billion over the period.
The coalition said it had exceeded its initial target by 40%, while development finance institutions jointly committed over $5.55 billion of financing of micro, small and medium enterprises in Africa over the period.
At the first Finance in Common Summit in November 2020, the EDFI Association, on behalf of its 15 European member development finance institutions, together with the African Development Bank, the West African Development Bank, FinDev Canada, the U.S. International Development Finance Corporation, and the Islamic Corporation for the Development of the Private Sector, launched the coalition. The Trade and Development Bank joined it soon after.
In response to the unprecedented global health and economic crisis caused by Covid-19, the coalition recognised the critical role development finance institutions play in supporting the crisis response in vulnerable countries.
African Development Bank President Akinwumi Adesina said: “Micro, small and medium-sized enterprises are vital to Africa’s prosperity, representing 90% of all businesses and generating more than half of all jobs. Many small entrepreneurs will tell you that limited access to finance is a major hurdle to growth. The $5.5 billion that we are committing together will go a long way in overcoming this hurdle. I am confident our initiative will make a major contribution to the success of micro, small, and medium-sized enterprises all over Africa. If they grow, we all do.”
“MSMEs are vital to Sub-Saharan Africa’s economy, representing 90% of trade and more than half the jobs in the region. As these businesses disproportionately suffered the impacts of the health crisis, we joined efforts to provide capital and advisory services to support the economic recovery. Surpassing our initial goal further motivates us to collaborate with our partners to promote sustainable and inclusive economic growth in Sub-Saharan Africa,” added Lori Kerr, CEO, FinDev Canada.
Ayman Sejiny, CEO of ICD, commented: “I would like to congratulate all the coalition partners and ICD’s team for exceeding the coalition’s target by committing over USD 5 billion for MSME financing in Africa. It is a great accomplishment and a culmination that will inspire our coalition of development partners to collaborate more to continue achieving more ambitious goals for sustainable development in Africa and our member countries.”
