MICROCAPITAL BRIEF: Grameen Credit Agricole Foundation Lends $1.8m to Entrepreneur Financial Center (EFC) in Zambia

The Grameen Crédit Agricole (GCA) Foundation, whose head office is in Luxembourg, has granted its first loan to Entrepreneur Financial Center (EFC), a microfinance institution (MFI) located in Zambia. The three-year loan is in local currency equivalent to approximately USD 1.8 million. EFC Zambia serves micro-, small and medium-sized enterprises (MSMEs) and has eight branches. The MFI holds 20,000 savings and term deposit accounts and as of February 2021 has disbursed 51,000 MSME loans totaling ZMW 155 million (USD 7.2 million). It has 3,000 borrowers, nearly half of whom are women or organizations owned by women. In addition to business loans, the MFI offers salary-backed loans as well as loans to fund home improvement, anticipated invoices and orders yet to be filled. These loans range in size from ZMW 5,000 (USD 232) to ZMW 1 million (USD 46,510) with terms as long as three years. All require collateral and insurance.

EFC Zambia grew out of a project launched in 1996 by the local affiliate of Switzerland’s CARE International, an NGO with members active in 104 countries as of 2020. In 2011, the MFI became one of multiple EFCs supported by Développement international Desjardins (DiD), a unit of the Canadian cooperative Desjardins Group. In addition to DiD, the equity investors in EFC Zambia are AfricInvest, Bamboo Capital, Triple Jump, and employees and customers of the institution.

Founded in 1970, DiD is a Canadian nonprofit corporation that seeks “to provide disadvantaged communities around the world with access to secure, diversified financial services.” It specializes in providing technical support and investment for the community finance sector. The NGO has worked in 65 nations across Africa, Asia, the Caribbean, Central and Eastern Europe and Latin America. DiD has CAD 50 million (USD 39 million) in funds under management as of 2020, including the Aequitas fund, which DiD subsidiary Fonidi Management launched in 2020.

Desjardins Group serves 7 million members and clients with services such as retail banking, wealth management, securities brokerage, venture capital and asset management. As of June 2020, the group reports total assets of CAD 350 billion (USD 266 billion), a gross loan portfolio of CAD 207 billion (USD 157 billion) and deposits of CAD 220 billion (USD 167 billion).

GCA Foundation was established in 2008 by Credit Agricole, a French retail bank, in partnership with Muhammad Yunus, the founder of Grameen Bank. The organization seeks to reduce poverty by providing funding and technical assistance to MFIs and other social businesses. As of January 2021, GCA Foundation has a portfolio of EUR 82 million (USD 99 million) outstanding to 81 partners in 39 countries in Africa and Eurasia. Eighty-three percent of its investees’ clients live in rural areas, and 87 percent are women.

By Steffi Ong, Research Associate

Sources and Additional Resources

GCA press release
https://www.gca-foundation.org/en/media-room/#the-foundation-grants-a-first-loan-to-a-new-partner-in-zambia

Information provided to MicroCapital by DiD

EFC Zambia homepage
https://efczambia.com.zm/

Desjardins homepage
https://www.desjardins.com/

CARE International
https://www.care.org/

GCA Foundation homepage
https://www.gca-foundation.org/

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