Enhancing smE financing in acp countries - ACP Business Climate

3
Access to finance: current channels, instruments and roles
Selected SME Access to Finance Initiatives
underlying the Study
The following initiatives have thus been reviewed for the
purposes of this study:
• AfDB: African Guarantee Fund for Small and Mediumsized
Enterprises 18
• IADB/MIF: a $100 million facility to support lending to
SMEs in Latin America and the Caribbean 19 ; and IADB-
Credit Guarantee Funds for SMEs
• AsDB: Development of SME Financing Support System 20
• BOAD: More than 50 credit lines to West African banks,
with an SME content of 9% and allocation ceilings of
about € 310,000
• CDB
• AFD: ARIZ Guarantee Funds 21 ; AFD guarantee operation
in Namibia
• BIO 22 (one of the EDFIs): BIO is a DFI 100% concentrated
on SME finance
• FMO: strong SME focus; strong capacity building focus 23
• IFC: extensive SME research & novel approaches; Africa
Micro Small Medium Enterprise Finance Program
(AMSME); risk-sharing models (see IFC cum SIDA). IFC:
Global Trade Finance Program (GTFP) 24 ; Bank SME training
2011 25 ; IFC Approach to SME Development in Africa 26
• African Trade Insurance Agency (ATI-ACA) 27 : documentary
credit guarantees
• USAID- Development Credit Authority (DCA) Loan
Portfolio Guarantee 28
As an example of a national public sector initiative, the
Small Enterprise Development Agency (SEDA) is an agency
of the South African Department of Trade and Industry. It is
mandated to implement the government’s small business
strategy; to design and implement a standard and common
national delivery network for small enterprise development;
and to integrate government-funded small enterprise
support agencies across all tiers of government 29 . SEDA
provides loans, guarantees and a seed capital fund for SMEs.
18 AfDB description: In particular, the provision of guarantees complemented by development of bank’s capacity to engage in SME lending seems to be one of the most effective policy instruments
for easing the access to credit for SMEs. The Africa Commission in 2009 called for the establishment of an African Guarantee Fund (AGF) for SMEs. The AfDB, the Danish Government (Danida)
and the Spanish Government (AECID) are currently implementing this initiative. The AGF will be a permanent regional conduit for channelling guarantees and technical assistance to financial
institutions in Africa with the objective of generating enhanced growth in the SME sector
http://www.afdb.org/en/topics-and-sectors/initiatives-partnerships/african-guarantee-fund-for-small-and-medium-sized-enterprises/
19 http://www.iadb.org/en/news/news-releases/2011-05-19/facility-supporting-sme-lending-in-latin-america,9376.html
20 http://www.adb.org/Documents/Reports/Dev_SME_Fin_System/default.asp
21 ARIZ has been in existence for some time as a guarantee scheme for facilitating access to finance by SMEs, mainly in Africa. In EURO or local currency . It applies both to loans, but also mezzanine
and equity investments.
22 http://www.bio-invest.be/
23 http://www.fmo.nl
24 http://www.ifc.org/ifcext/globalfm.nsf/Content/GTFP
25 http://www.iobf.org/Conferences.aspx?Id=31&lang=en
26 http://www1.ifc.org/wps/wcm/connect/REGION__EXT_Content/Regions/Sub-Saharan+Africa/Advisory+Services/SME+Initiatives/
27 http://www.ati-aca.org/inside.php?id=37
28 These guarantee agreements are designed to encourage lenders to extend financing to new sectors and regions, or to improve loan terms. Loan portfolio guarantee is a guarantee on a
portfolio of loans that a financial institution makes in an identified sector. The DCA portfolio of 267 guarantees spans 64 countries. Through DCA, 87,000 borrowers have accessed credit from
191 financial institutions. http://pdf.usaid.gov/pdf_docs/PNADT028.pdf USAID- Official Loan Support Programs for SMEs (2009) http://pdf.usaid.gov/pdf_docs/PNADT028.pdf
29 http://www.seda.org.za/Pages/Seda-Welcome.aspx
Enhancing SME financing in ACP countries
15