MICROCAPITAL BRIEF: Vital Finance Borrows $5m from EIB for Microfinance in Benin, Mostly for Women

The EU’s European Investment Bank (EIB) recently agreed to a partnership with Vital Finance, a microlender in Benin, to support smaller businesses via a loan of EUR 4 million (USD 4.8 million). The wholesale loan, which is the first Vital Finance has taken from EIB, is to fund an estimated 77,000 retail loans, 70 percent of which are to go to female entrepreneurs. Vital Finance CEO Wakil Adjibi stated that the partnership with EIB “will enable Vital Finance to continue expanding and helping businesses in Benin to create jobs.”

Founded in 1998, Vital Finance offers group and individual loans for one to two years in amounts of XOF 50,000 (USD 90) to XOF 20 million (USD 36,000) at an interest rate of 1.75 per month. Its individual loans for income generation require collateral, while consumption loans require proof of salary.

EIB, founded in 1958, is “focused on innovation, SMEs [small and medium-sized enterprises], infrastructure and climate,” primarily in EU member states and potential future member states. In addition to funding, the institution “adds value in project implementation and the modernisation of public policies thanks to its technical and financial expertise and advisory services.” During 2019, the institution disbursed EUR 48 billion (USD 57 billion), about 90 percent of which it deployed within the EU.

By Tejas Gumudavelly, Research Associate

Sources and Additional Resources

EIB press release
https://www.eib.org/en/press/all/2021-085-des-milliers-d-entreprises-beneficieront-du-premier-partenariat-entre-la-bei-et-vital-finance-benin

Vital Finance homepage
http://www.vitalfinance.com/

Oikocredit profile on Vital Finance
https://www.oikocredit.coop/en/what-we-do/partners/partner-detail/11114/vital-finance

EIB homepage
https://www.eib.org /

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