Proparco & Société Générale Moçambique join forces to promote SMEs in Mozambique
Proparco’s grant of a portfolio guarantee to Société Générale Moçambique will enable the bank to increase its SME financing activity. This high-impact operation confirms Proparco’s as well as Société Générale Moçambique’s commitment to supporting entrepreneurs and the private sector in fragile countries.
The EURIZ portfolio guarantee granted to Société Générale Moçambique covers an amount of $3.5mn. It will share the risk associated with financing very small, small, and medium-sized enterprises (VSEs), thus increasing the bank’s ability to finance the economy. MSMEs owned by women and those active in the agricultural sector will be particularly targeted.
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This operation demonstrates the priority accorded by Proparco to supporting the private sector in fragile countries, particularly in high-impact sectors. By supporting women entrepreneurs, this project contributes to the achievement of Sustainable Development Goal 5 (Gender Equality) and to 2XChallenge, an initiative of a group of development finance institutions to promote gender equality.
“Proparco is pleased to be able to count on a key partner like Société Générale to support SMEs in a country where financial inclusion remains a huge challenge. By targeting women entrepreneurs and the agricultural sector, this project addresses important development challenges and has major impacts for Mozambique”. said Siby Diabira, Regional Director of Proparco for Southern Africa.
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Société Générale Group launched the strategic program – Grow with Africa, aimed at growing and increasing the Group’s exposure to SMEs by 4 billion Euros. The Group believes that SMEs are at the heart of the African economy, so it encourages the development of innovative financial solutions adapted to local markets.
“The partnership signed today between Société Générale Moçambique and Proparco, will facilitate the access to credit to SMEs, in particular in sectors with high impact in the development of Mozambique, with a more specific focus in agribusiness which is already one of the key sectors of the bank. The line will also support women entrepreneurship by supporting business owned enterprises or associated participation” said Sterghios Dassarecos, Chief Executive Officer of Société Générale Moçambique.
“After 5 years of operations in the Mozambican market, Banco Société Générale Moçambique reiterates with this action its ambition to be a reference bank in this market and an active partner in the development of the local economy, by supporting SMEs, especially in today’s context, where these companies face difficulties resultant from the world pandemic crisis.” He added.
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Supporting African small and medium-sized enterprises, a priority for France and the AFD Group
This first operation between Société Générale Moçambique and the AFD Group further strengthens the historic relationship that unites the AFD and Société Générale groups on the African continent. It is part of the French initiative Choose Africa which aims to allocate $4bn to finance and support start-ups, small and medium-sized enterprises in Africa over the period 2018-2022. Société Générale is a key partner in this initiative, being the first financial institution to deploy a new exceptional offer of loans guaranteed at 80% by AFD Group in 4 African countries.
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More than $2.3mn have already been committed by AFD and Proparco under Choose Africa. More than 16,000 start-ups and SMEs, as well as tens of thousands of micro-entrepreneurs on the continent, will benefit from this funding over the next few years.
“The European Union and its member states are Mozambique’s leading development partners in all sectors. As such, the EU also plays a key role in this initiative as the guarantee granted to Société Générale Moçambique is supported by the Union and the European Development Fund. The emphasis on the agricultural sector, which employs the majority of the active population, and on women, is in line with France’s diplomatic priorities, which are feminist and oriented towards African youth.” added David Izzo, Ambassador of France to Mozambique.
EURIZ guarantee
Launched in May 2019 with the support of the European Union and the European Development Fund, and the African, Caribbean, and Pacific Group of States (ACP), the EURIZ guarantee aims to facilitate access to credit for SMEs, in particular in sectors with a high development impact, in order to help them play their essential role in economic growth and job creation.
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