The Agence Française de Développement (AFD) Group is mobilizing an additional €1 billion to promote African micro, small, and medium-sized firms (MSMEs), boosting the mechanism’s total value to €3.5 billion instead of the €2.5 billion originally anticipated for 2018-2022.
Due to current health restrictions and limited business activity, entire sectors of Africa’s economy are experiencing a significant slowdown. MSMEs are on the front lines, accounting for 90% of the entrepreneurial fabric and 60% of employment on the continent.
AFD Group is mobilizing €1 billion under the Choose Africa initiative, in addition to emergency measures (such as deferred repayments and technical assistance) that offered urgent initial support. The goal is to assist these MSMEs, which have been weakened by the massive consequences of the Covid-19 outbreak. This increased commitment raises the presidential initiative’s total funding to €3.5 billion, up from €2.5 billion previously projected for 2018-2022.
Rémy Rioux, Chief Executive Officer, AFD: ”After providing €1.2 billion of assistance to health stakeholders in Africa to address the Covid-19 pandemic, AFD Group is proud to be supporting, with the lead of the French President, economic players on the continent under the Choose Africa initiative. To provide countercyclical solutions to African entrepreneurs hard hit by a crisis that is exogenous to them while helping them become the architects of a sustainable recovery, France is mobilizing an additional €1 billion. This program now stands at €3.5 billion. It is also contributing to the collective effort of public development banks towards African SMEs, announced at the Finance in Common Summit for all those who make Africa the leading continent for entrepreneurship and innovation.”
Proparco, AFD Group’s private-sector lending arm, is implementing this new “Resilience” component. Its goal is to empower MSMEs, who are the backbones of the African economy, with financing solutions. It is France’s contribution to a $4 billion pledge to African MSMEs made by twenty public development banks, including Proparco, at the first Finance in Common Summit, which will take place from November 9 to 12, 2020, at AFD’s initiative.
The Choose Africa program, which is dedicated to financing and assisting African startups, microenterprises, and SMEs from now until 2022, will be strengthened and scaled up as a result of this new contribution.
Grégory Clemente, Chief Executive Officer, Proparco: ”The exceptional difficulties and needs expressed by African microenterprises, SMEs and mid-cap companies, including those of French entrepreneurs in Africa, called for an increased financial commitment and the implementation of new and targeted tools. The support from the French Government and European Union is today allowing us to deploy a new component of the Choose Africa initiative with a set of tailor-made solutions to address the needs of the crisis. This initiative is being deployed in partnership with local financial systems.”
Under Choose Africa, the AFD Group has now committed over €2 billion, helping over 16,000 firms and tens of thousands of entrepreneurs across the continent. As a result, they profit from increased credit availability or a stronger capital foundation. This funding will be combined with support initiatives to help 2,000 businesses improve their capabilities.
AFD Group’s African partners (incubators, investment funds, local banks, and microfinance institutions) are currently contributing to the initiative’s success.
