MICROCAPITAL BRIEF: FMO Loans $14m to COFINA for Microfinance, SMEs in Senegal, Côte d’Ivoire

The Netherlands Development Finance Company, which is also known by its Dutch acronym FMO, recently disbursed a loan to Guinea-based microfinance group Compagnie Financiere Africaine (COFINA) to be distributed to its subsidiaries in Senegal and Côte d’Ivoire. Of the loan proceeds, EUR 7.5 million (USD 8.2 million) is flowing to COFINA Senegal, and EUR 5 million (USD 5.5 million) is going to COFINA Côte d’Ivoire, which is in the process of phasing out its previous name Compagnie Africaine de Crédit. The goal of the loan is to create jobs and stimulate economic growth, including by lending to businesses owned by women and youth. FMO funded the loan from MASSIF, an investment vehicle it manages for the Dutch government with the intent of acting as “a catalyst for the private financial sector, while stimulating financial inclusion in developing countries.”

According to Huib-Jan de Ruijter, the Director of Financial Institutions at FMO, “These transactions fit perfectly with FMO’s approach to build strong relationships with MFI [microfinance institution] groups in Francophone Africa. COFINA has shown a strong willingness to grow and understands how real impact can be made through financial inclusion.”

Founded in Guinea in 2009, COFINA aims to serve the “Missing Middle,” a phrase that refers to small and medium-sized enterprises that are too small to get significant attention from traditional banks, but need larger loans than MFIs can provide. In addition to Guinea, Côte d’Ivoire and Senegal, COFINA operates in Burkina Faso, Congo-Brazzaville, Gabon and Mali.

As of 2019, COFINA reports a total balance sheet of CFA 212 billion (USD 353 million), outstanding credits of CFA 146 billion (USD 243 million) and deposits of CFA 134 billion (USD 224 million). COFINA employs 1,340 individuals and serves approximately 175,000 clients.

COFINA Senegal has a balance sheet of CFA 51 billion (USD 85 million), outstanding loans totalling CFA 36 billion (USD 60 million) and deposits of CFA 27 billion (USD 45 million). COFINA Côte d’Ivoire reports a total balance sheet of CFA 76 billion (USD 127 million), outstanding credits of CFA 54 billion (USD 90 million) and deposits of CFA 50 billion (USD 83 million).

Established in 1970, FMO is 51-percent held by the Dutch government and 49-percent by private sector institutions. The bank works toward the UN’s Sustainable Development Goals by funding capacity development as well as placing debt and equity investments in sectors such as agribusiness, financial institutions and energy. For the year 2019, the bank reported a net profit of EUR 120 million (USD 131 million) on an investment volume of EUR 2.9 billion (USD 3.2 billion).

By Jessica McLeod, Research Associate

Sources and Additional Resources

FMO press release
https://www.fmo.nl/news-detail/5db3b4ed-257e-4fc5-90bd-8ac4a69986a7/fmo-collaborates-with-cofina-one-of-the-few-home-grown-microfinance-groups-in-africa

FMO homepage
https://www.fmo.nl/

FMO 2019 annual report
https://annualreport.fmo.nl/2019/annual-report-2019/at-a-glance/2019-performance

COFINA group homepage
http://www.groupecofina.com/

COFINA group report for 2019
http://www.groupecofina.com/chiffres-cles/

COFINA Côte d’Ivoire homepage
https://cac-ci.com/

COFINA Senegal homepage
https://www.cofinasenegal.com/

MicroCapital article on FMO
https://www.microcapital.org/microcapital-brief-fintech-liwwa-raises-21m-in-debt-equity-for-sme-lending-platform-in-egypt-jordan-from-investors-including-fmo-500-startups-edgo-efg-ev-chris-larsen-wamda/

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