Senegal's first Islamic microfinance institution has signed a loan agreement with Fonsis. This funding will help expand the availability of Islamic financing for local SMEs.
The Islamic microfinance institution Taysir Finance SA, active in Senegal, has secured CFA5 billion (around $8.2 million) from the Sovereign Fund for Strategic Investments (Fonsis). This funding, signed on October 15, will be used to support small and medium-sized enterprises (SMEs) across various sectors.
Taysir will provide beneficiaries with microfinancing solutions that comply with Sharia law. “This partnership with Taysir Finance demonstrates the Senegalese sovereign fund’s commitment to co-developing innovative financing solutions tailored to the private sector’s needs in collaboration with banks and decentralized financial systems,” said Babacar Gning, the general director of Fonsis.
Fonsis tapped into its Islamic Recovery Fund (FIR), a CFA20 billion facility launched in October 2023, to finance capital and debt for SMEs affected by COVID-19. The FIR assists companies seeking liquidity through partner banks. Taysir Finance is the third financial institution to partner with Fonsis, following the Islamic Bank of Senegal and Coris Bank Baraka. The FIR aims to provide loans ranging from CFA10 million to CFA50 million to about 40 local businesses.
Taysir operates in a market dominated by 297 decentralized financial systems (SFDs) that serve nearly 4.3 million clients through over 905 service points. The financial inclusion rate stands at 19.7%. Savings and credit balances reach CFA570.5 billion and CFA752.6 billion, respectively, according to Alioune Dione, Senegal’s Minister of Microfinance and Social and Solidarity Economy, during the 29th session of the National Committee for Microfinance Coordination on July 25, 2024. These Senegalese SFDs lead the WAMU zone in total assets.
Since its launch in January 2022, Taysir has become Senegal’s first Islamic microfinance institution, specializing in financial solutions for SMEs and the informal sector. According to a report released in September by the Central Bank of West African States (BCEAO), SMEs, which form the backbone of economies in the WAEMU, receive more financing compared to larger companies.
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