(Ecofin Agency) - The International Finance Corporation (IFC) has officially approved its multi-currency loan to the Baobab Group, as announced in late May 2023. This financial facility will be channeled to support local micro, small, and medium-sized enterprises (MSMEs).
On Tuesday, July 25, Baobab Group, a financial services provider operating in 8 African countries and one province in China, announced securing six loan agreements worth $47.5 million from the International Finance Corporation (IFC).
The partnership aims to bolster Baobab Group's financial operations in six sub-Saharan African countries: Burkina Faso, Ivory Coast, Madagascar, Mali, the Democratic Republic of the Congo (DRC), and Senegal. The group plans to expand its banking products, savings solutions, and digital nano-loans to micro, small, and medium-sized enterprises (MSMEs), including women-owned businesses in the targeted countries.
"This new partnership with IFC will support our strategy to strengthen our leadership in larger markets such as Côte d'Ivoire and Senegal and to pursue growth in currently more fragile markets - like Burkina Faso, Mali, and the Democratic Republic of the Congo,'' said Philip Sigwart, Baobab Group CEO.
The loan agreement comes two months after IFC announced its intention to engage with Baobab Group by providing funding to six of its African subsidiaries. The financial institution, which contributed to the creation of the Baobab Group in 2005, formerly known as MicroCred, has been supporting the financial services holding company through loans and equity investments in its African and Chinese subsidiaries. This new agreement will bolster the longstanding relationship between the two entities.
As of December 31, 2021, Baobab Group served over 457,000 active clients, with 47% being women. The majority of its clients were micro-entrepreneurs and SMEs. The gross loan portfolio of Baobab Group amounted to €723 million, with an average loan size of €3,111.