Banks and Financial services

The existance of a resilient, effiecient and well-regulated financial system is essentiel to the stability of the economies of developing countries.
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Financial systems

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Financial systems essential to the stability of southern economies

Enterprises, both large and small, are one of the engines of economic growth in Southern countries. In order to ensure their development and have a knock-on effect on local economies, as well as on job and wealth creation, they need to be able to rely on resilient, effective and well-regulated financial systems that contribute to financing their investments via medium and long-term loans (5 to 20 years). Yet this demand continues to be poorly covered in developing and emerging countries, as local banks do not have the necessary resources. Business and individual deposits  are often insufficient to be mobilized and earmarked for productive investments, especially in foreign currency (euros, dollars). The other “traditional” sources of bank refinancing, such as the interbank market or bond issues, are often weak. In this context, banks in the South struggle to play their role as “funders” of local economies.  

This difficulty to access credit is a real barrier to private sector growth and particularly affects small and medium-sized enterprises (SMEs).

Building the capacities of financial actors

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Building the capacities of financial actors to invest in key activities for development

Support for the private financial sector is one of Proparco’s main areas of operation. Its support benefits banks, non-banking financial institutions (for example, institutions specialized in mortgage credit or financing the agricultural sector), as well as insurance and micro-insurance companies. It aims to strengthen and regulate financial systems in the South, while contributing to the dissemination of high environmental, social and governance (ESG) standards.

Proparco’s client banks are engaged in, or pledge to engage in, an environmental and social risk management process related to their activity and the activities of companies in their portfolio.

Proparco's operations

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Proparco’s operations more specifically contribute to:

  • Diversifying the range of financial products on local markets in order to better meet the needs of companies (loans in local currency, leasing, development of financial markets…) and individuals (housing loans, microfinance…);
  • Developing credit lines earmarked to finance projects for the agriculture and agrifood sector, renewable energies and energy efficiency, education and health, but also projects that aim to improve the ESG practices of companies, as well as access to credit for SMEs and housing for the middle classes;
  • Strengthening national banking actors and expanding regional groups (particularly on Sub-Saharan Africa’s frontier markets), but also supporting regulatory changes in the sector.
41%
of Proparco's signatures are with financial institutions
€2,199 M
in oustanding amounts for financial institutions and financial markets
23
new projects signed in 2016
47%
of employees in banks, businesses, infrastructure operators, and investment funds are women

 

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