Ecobank Group, the pan-African banking group, has signed an agreement for a €100 million (US$112.22m) long-term credit facility over 9 years with the European Investment Bank (EIB) to support the recovery of African SMEs from the COVID-19 pandemic.
The facility is split into three regional facilities: West & Central Africa, Eastern Africa, and Southern Africa. Funding will be provided through Ecobank affiliates, for investment projects undertaken by private sector companies.
The EIB made the facility available through its COVID-19 Rapid Response Facility, for private sector entities active in eligible productive sectors, with fewer than 3,000 employees.
The loan will also be accompanied by technical assistance under the AWRI (African Women Rising Initiative) program of the EIB with gender finance-focused training and capacity building for lending to women entrepreneurs, closely aligned with the Ellevate by Ecobank initiative which supports women-focused businesses across the continent.
Ecobank Group and EIB are also working on a €15 million (US$16.83m) “SME Access to Finance” Risk Sharing Facility Agreement granted by the EU’s European Fund for Sustainable Development (EFSD), that will support loans to SMEs worth €95 million (US$106.61m).
“At Ecobank we are fully committed to providing a range of initiatives that support the growth and success of Africa’s Small and Medium-sized Enterprises and create employment opportunities,” Ade Ayeyemi, Chief Executive Officer, Ecobank Group, said.
“This informed the credit facility that we have just secured from the EIB which we believe will deliver real impact in our joint mission to develop SMEs across Africa.
“The facility will support the recovery of African SMEs from the COVID-19 pandemic while also helping to provide them with the impetus to grasp the immense growth opportunities from the African Continental Free Trade Area’s vast single market. We thank the EIB for its focus and commitment to the continent.”
The facility affirms joint Ecobank Group and EIB targeted support for business investment across Africa, with particular support for the sectors most impacted by the COVID-19 pandemic.
This agreement follows on from the EIB’s signing of a €12.5 million (US$14.03m) loan to Ecobank Malawi in December 2020, to improve access to finance for SMEs in Malawi’s agricultural sector to expand, upgrade and modernize their equipment.
“The EIB, as part of Team Europe, works with leading banks and financial partners across Africa to enhance private sector access to finance,” Ambroise Fayolle, Vice-President, European Investment Bank, said.
“This latest cooperation with Ecobank Group will help companies to better tackle challenges triggered by the COVID-19 pandemic, unlock economic and social opportunities, especially for SMEs and women-owned and women-run enterprises, across Sub-Saharan Africa in the coming weeks.”
The latest cooperation between Ecobank Group and the European Investment Bank to support private sector investment across Africa was formally agreed at the EU Delegation to Togo in Lomé, in the presence of Koen Doens, Director-General for International Cooperation and Development at the European Commission.
The announcement was made during a Team Europe visit to Togo by EIB Vice President Ambroise Fayolle, Rémy Rioux, Chief Executive Officer of the Agence Française de Développement and Koen Doens.
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