Finance

UMOA to Launch Bond Market for SMEs

UMOA to Launch Bond Market for SMEs
Friday, 04 October 2024 05:53

When it becomes operational, this market will provide additional funding for SMEs, which are vital to driving economic growth in the UMOA region.

The West African Monetary Union (UMOA) is set to create a bond market specifically for small and medium-sized enterprises (SMEs). A feasibility study for this project began on October 1, 2024. The study will be conducted by the UMOA Financial Market Authority (AMF-UMOA), the regional financial market regulator, in partnership with the Spanish government.

This bond market aims to diversify funding sources for SMEs by providing access to financial resources through bond issuance. "Creating a bond market dedicated to SMEs is a credible alternative alongside bank loans to support the development ambitions of our SMEs, the backbone of our economies," said Badanam Patoki, president of AMF-UMOA.

The announcement has received mixed reactions from financial players in the region. Some, like Maxime Lokossi, a consultant in meso-finance and digital finance residing in Benin, see it as a promising opportunity for SMEs in the Union. "I hope this study leads to a dynamic bond market for UMOA SMEs. It offers significant growth potential for these businesses," he noted.

Other financial experts are more cautious about the interest this market might attract. "Any initiative to expand funding for SMEs is worth supporting. However, we need to define what constitutes an SME and what could attract them to this type of funding. Access to funding is generally easier with commercial banks. Long-term financing is already available from these banks. Fixed-rate financing would be possible if banks were willing, but that is not proven," emphasized Clive Wykes, a senior bank management consultant. He added, "In conclusion, banks might not be aggressive investors in SME bonds, especially since they can offer long-term and fixed-rate financing. However, their reluctance to do so highlights their shortcomings."

It is important to note that the UMOA regional financial market allows businesses, states, and local communities to raise funds by issuing financial securities. It currently consists of a money market where financial institutions exchange short-term liquidity with the central bank or among themselves, and a capital market for medium- and long-term financing. The capital market includes both an equity market and a bond market.

On the same topic
UBA UK, BII sign intent to expand trade finance in Africa Partnership targets funding gaps for intra-African trade businesses Initiative aims...
IMF approves reviews of Seychelles’ reform programs, unlocking $45 million Total disbursements since 2023 to reach about $105.1...
Cemac developing system to track informal cross-border trade data Regional workshop trains experts on mapping flows and estimating...
Nigerian insurers Guinea, Sovereign Trust seek 10.8bn naira capital Guinea launches rights issue; Sovereign Trust awaits NGX approval Raises aim meet...
Most Read
01

Telecel Ghana to boost network investment by 150% in 2026 Expansion targets capacity, reliabi...

Telecel Ghana plans 150% investment increase in MTN-dominated market
02

CCR-UEMOA presents mid-term review of private sector competitiveness efforts Reforms, AfCFTA trai...

Strengthening the Business Climate in WAEMU Countries: CCR-UEMOA Reviews Its Midterm Record
03

Togo parliament adopts WAEMU law against currency counterfeiting Bill defines offences including ...

Togo Passes Law to Criminalize Counterfeiting of West African CFA Franc
04

BOAD plans 750 billion CFA francs financing for Burkina Faso Funds to support key sectors and Rel...

BOAD to Mobilize $1.3 Billion in Support of Burkina Faso 2026-2030 Development Plan
05

Yassir moves into media distribution in France with the acquisition of Paris-based adtech firm Kaw...

Algeria-based Yassir expands into media distribution in France with planned acquisition of Kawarizmi
Enter your email to receive our newsletter

Ecofin Agency provides daily coverage of nine key African economic sectors: public management, finance, telecoms, agribusiness, mining, energy, transport, communication, and education.
It also designs and manages specialized media, both online and print, for African institutions and publishers.

SALES & ADVERTISING

regie@agenceecofin.com 
Tél: +41 22 301 96 11 
Mob: +41 78 699 13 72


EDITORIAL
redaction@agenceecofin.com

More information
Team
Publisher

ECOFIN AGENCY

Mediamania Sarl
Rue du Léman, 6
1201 Geneva
Switzerland

 

Ecofin Agency is a sector-focused economic news agency, founded in December 2010. Its web platform was launched in June 2011. ©Mediamania.

 
 

Please publish modules in offcanvas position.