Proparco teams up with DEG, signs US$65mn loan to MCB to assist its customers affected by COVID-19
A USD 65m loans have been signed between Proparco, its German counterpart DEG, and Mauritius Commercial Bank Limited (MCB). The objective is to support Mauritian businesses affected by the crisis
The Mauritian economy has been impacted by the Covid-19 pandemic and has contracted in 2020. It has heavily been affected by the fall in tourism, the decrease in external demand, and the lockdown measures.
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Mauritian companies have faced many short-term challenges: reduced economic activity and cash flow problems These difficulties particularly affect SMEs, yet they play a crucial role in job creation and the dynamism of the economic recovery.
The loan by PROPARCO and DEG (USD 50m for PROPARCO) will help the country’s leading bank meet the needs generated by the health crisis.
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The objective is to allocate additional liquidity to MCB over a 3-year period to facilitate access for companies to strengthen its support to companies in their endeavor to manage the Covid-19 crisis more efficiently.
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“We are pleased to be renewing our support to MCB, a longstanding and strong partner of PROPARCO, especially during the current health and economic crisis”, said Grégory Clemente, Chief Executive Officer of PROPARCO. “Local financial institutions are key players in the response to the crisis by maintaining and strengthening their financing solutions for local companies, especially SMEs. In this respect, this operation is fully in line with PROPARCO’s priorities, in particular under the French Choose Africa initiative and its Resilience component”, he added.
Indeed, through the Choose Africa initiative, PROPARCO is a partner to around a hundred financial institutions that supply African local economies and SMEs. Due to the current health measures, entire sectors of the economy are at a standstill and SMEs are faced with significant cash requirements. To preserve jobs, it is important to offer them financing solutions via local financial systems. To contribute to this effort, PROPARCO is planning to deploy over one billion euros from now until the end of 2021.
Alain Law Min, Chief Executive Officer, MCB Ltd, welcomed the signing of this loan agreement, which will contribute towards strengthening the Bank’s support to companies that have been impacted by the pandemic.
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“This agreement comes at a most appropriate time, where companies, large and small, are in need of our assistance so that they can build back better and become more digital and sustainable. Specifically, the loan will be targeted towards small and medium-sized companies in the Sub-Saharan region to support any expansion or modernization projects in their journey towards sustainable recovery. In addition, this credit facility reflects the international recognition of MCB’s high level of creditworthiness and its active role in funding high-impact projects in the sub-Saharan and the Indian Ocean regions. I would also like to thank Proparco and DEG, our long-standing and valued partners, for their trust and collaboration especially during this challenging context and we look forward to consolidating our relationship further.”
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