THE AFRICA BAZAAR STAFF
January 25, 2021
The U.S. International Development Finance Corporation and Cordaid Investment Management signed $14.75 million loan agreement to provide small business loans to small and medium enterprises in West Africa and the Sahel region.
The funds, which will help boost economic recovery in the region as well as strengthen financial stability, will set aside 30 percent of its lending to support businesses that are owned by or led by women, or which offer a product or service that delivers tangible benefits to women—a main core of DFC’s 2X Women’s Initiative.
“The portfolio guarantee is pivotal in our ambition to deploy growth capital to SMEs in the most underserved economies. DFC’s instruments will enable us to raise additional private capital from likeminded impact investors,” said Hann Verheijen, Cordaid Investment Management Managing Director.
The loan also advances DFC’s commitment to focus investments in low and lower-middle income countries and in conflict-affected states.
Speaking about the latest investment, DFC’s Acting Chief Executive Officer Dev Jagadesan said in a statement the funds will “advances our commitment to focus on the regions where investment is needed most,” by stimulating economic activities in “thousands of entrepreneurs in several fragile countries that are facing significant economic challenges, including from the impacts of the COVID-19 pandemic.”
The guaranty loan was offered with a $2 million in first loss grant capital from the U.S. Agency for International Development’s West Africa Trade and Investment Hub through DFC’s new Mission Transaction Unit., which works with local USAID missions to support investment in developing markets.
Cordaid loans money to small and medium enterprises and microfinance institutions in Burkina Faso, Guinea, Mali, and Sierra Leone.