- IFC and Equity Banque Commerciale du Congo (EquityBCDC), a subsidiary of Equity Group, has partnered to increase access to finance for small and medium-sized enterprises (SMEs) in the DRC and to promote economic diversification in the country.
- Under the partnership, IFC will support the expansion of EquityBCDC’s SME-lending operations through a $12.5 million risk sharing facility (RSF).
- Through the partnership, EquityBCDC aims to provide an additional 1,700 SME loans within the DRC and expand its SME portfolio from $250 million in 2021 to $631 million by 2026.
IFC and Equity Banque Commerciale du Congo (EquityBCDC), a subsidiary of Equity Group, has partnered to increase access to finance for small and medium-sized enterprises (SMEs) in the DRC and to promote economic diversification in the country.
Under the partnership, IFC will support the expansion of EquityBCDC’s SME-lending operations through a $12.5 million risk sharing facility (RSF).
IFC is also providing advisory services to strengthen EquityBCDC’s SME banking solutions and enhance its risk management approach, supporting the bank’s growth strategy.
Through the partnership, EquityBCDC aims to provide an additional 1,700 SME loans within the DRC and expand its SME portfolio from $250 million in 2021 to $631 million by 2026.
Speaking during the partnership agreement signing ceremony in Kinshasa, Celestin Mukeba, EquityBCDC Managing Director said, “Small and medium-sized enterprises remain a focal point for EquityBCDC’s business and our partnership with IFC will allow us to extend our loan guarantee program which will enhance our product offering to this particular market segment.”
Also speaking at the event, Jumoke Jagun-Dokunmu, IFC Regional Director for Eastern Africa said, “Increasing access to finance for smaller businesses is a priority for IFC in the DRC, where many businesses struggle to access funding in order to grow. IFC’s support will allow EquityBCDC to boost its support for smaller businesses in the country, contributing to economic growth and job creation.”
Powering SMEs
SMEs in the DRC identify financing as a major obstacle to growth. According to the World Bank Group’s MSME finance gap report, 53 percent of MSMEs experience constraints when accessing a loan or line of credit, and the unmet finance gap is estimated to be equivalent to 26 percent of GDP.
The partnership with EquityBCDC deepens IFC’s longstanding relationship with Equity Group to support SME development. In November 2021, IFC loaned the equivalent of $50 million in Congolese francs to EquityBCDC to help underserved SMEs in the DRC access local currency financing and avoid the risk of currency fluctuations.
The partnership is also part of IFC’s Small Loan Guarantee Program (SLGP), which strengthens the capacity of financial institutions for risk taking and financing SMEs in IDA PSW-eligible countries. The SLGP is supported by the IDA18 Private Sector Window (IDA-PSW)’s Blended Finance Facility.
“Increasing access to finance for smaller businesses is a priority for IFC in the DRC, where many businesses struggle to access funding in order to grow. IFC’s support will allow EquityBCDC to boost its support for smaller businesses in the country, contributing to economic growth and job creation,”Dokunmu added.
The global lender also recently announced new investment in Rawbank, a leading bank in the DRC, to improve access to finance for the country’s micro, small, and medium-sized enterprises (MSMEs), supporting growth and job creation in the country.
Under the partnership, signed in Kinshasa, IFC will provide a loan of up to $35 million to Rawbank to help the bank expand its lending to MSMEs. The investment will significantly increase the availability of longer tenor financing for smaller businesses in a market where the MSME financing gap is estimated at 26 percent of GDP.
This funding is part of Rawbank’s commitment to continuously support Congolese SMEs, a strategic priority for the bank.
IFC’s investment is drawn from its Base of the Pyramid Program, which was launched in 2021 to help financial services providers deliver funding to small businesses in the aftermath of the COVID-19 pandemic. IFC’s financing is supported by the International Development Association’s Private Sector Window.
IFC will also provide advisory services to strengthen Rawbank’s risk management approach. Rawbank places particular emphasis on implementing a robust and efficient risk management organization across all business lines, markets and regions in which it operates.
“IFC’s financial support is another great step forward for us to benefit from strong, secure and best practice financing to support the Congolese SMEs that are the heart of our economy. This partnership will allow us to benefit from best practices to support our portfolio diversification,” said Mustafa Rawji, General Manager of Rawbank.
IFC’s strategic priorities in the DRC focus on energy, telecom and ICT, access to finance for MSMEs, housing and agribusiness. As of December 2022, IFC had a portfolio of $220.6 million in the DRC.
IFC—a member of the World Bank Group—is the largest global development institution focused on the private sector in emerging markets.
The organisation works in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries.
In fiscal year 2022, IFC committed a record $32.8 billion to private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity as economies grapple with the impacts of global compounding crises.
