By Adedapo Adesanya
The International Islamic Trade Finance Corporation (ITFC) has granted the sum of €20 million as part of efforts to continue its ongoing commitment to strengthen private sector development in Burkina Faso through its latest Murabaha financing agreement with Coris Bank International (CBI).
ITFC, a member of the Islamic Development Bank Group, said the agreement is part of the West Africa SMEs Program, a flagship program of ITFC aimed at improving access to finance for SMEs in the region by providing them, as well as partner banks, with credit and capacity building facilities.
It is estimated that SMEs represent 90 per cent of businesses and provide 80 per cent of private-sector jobs in West Africa. However, they often struggle to convince financial institutions of the creditworthiness of their businesses and financing requests.
ITFC’s West Africa SMEs Program enables entrepreneurs in the region to strengthen business viability by accessing capacity development training in the crucial areas of accounting and finance, business plan development, and management best practices amongst others. In tandem, it deploys assistance to banks to strengthen SME lending practices and modernize assessment tools and lending processes.
The program is focused on the West African Economic & Monetary Union (WAEMU) zone, which in addition to Burkina Faso includes Benin, Côte d’Ivoire, Guinea-Bissau, Mali, Niger, Senegal, and Togo.
The Chief Executive Officer of ITCC, Mr Hani Salem Sonbol, reiterated the importance of the private sector in the Corporation’s overall trade finance and development focus for the region.
“The private sector is the key to socio-economic transformation and is at the heart of ITFC’s strategy for the development of member countries.
“In Burkina Faso, where the initial pilot initiative was rolled out in 2018, the West Africa SMEs Program has already proven to be beneficial in reducing the trade finance gap for local businesses by enhancing entrepreneurial capacity and increasing their business viability.
“This latest financing will further boost the nation’s efforts to diversify its economy and strengthen private sector growth.”
Commenting on the latest financing agreement, Mr Diakarya Ouattara, Managing Director of Coris Bank International said: “CBI has been a key partner in the implementation of the West Africa SME Program since it was piloted in Burkina Faso.
“The programme has benefitted local SMEs to build capacity and at the same time enabled CBI to strengthen our SME lending practices. The result is the development of a stronger SME sector, which is fundamental to the economic future of the country.”
This latest agreement marks the fifth of its kind between ITFC and CBI for a total of more than $62 million which in addition to driving private sector development also serves to promote Islamic finance in the West African region.
In 2018, ITFC and the Government of Burkina Faso signed a five-year $1.5 billion framework agreement to drive trade development in the country.
Since 2008, ITFC has approved a total of $2 billion in trade financing towards the country.
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Dipo Olowookere