ACEP Senegal contributes to Senegal's food sovereignty with an agricultural microfinance solution

The senior loan of XOF 6.5 billion (€10 million) that Proparco has just granted to the Union des Mutuelles Alliance de Crédit et d'Épargne pour la Production Sénégal (ACEP SN), a major player in microfinance in Senegal, will contribute more specifically to meeting two key development challenges for Senegal: food sovereignty and the reduction of gender inequalities.

Strengthening the entire local agricultural chain

Over the next two years, the partnership should at least double ACEP SN's lending to micro-farmers and micro-borrowers throughout the local agri-food value chain, whose activities contribute directly or indirectly to food self-sufficiency in Senegal. This operation is part of the Food & Agriculture Resilience Mission (FARM) initiative, launched in 2022 by Emmanuel Macron, President of the French Republic, alongside the European Union, the G7 and the African Union. Its aim is to boost food security in the most vulnerable countries.

In concrete terms, Proparco's line of credit will enable ACEP to create nearly 7,500 jobs and support nearly 2,300 SMEs, at least half of which are in the agricultural sector.

ACEP SN is a key partner for entrepreneurs. The institution has a singular presence in this sector thanks to its excellent geographical coverage, relying on mutuals located in the regions that make up Senegal's agricultural heartland, in particular Kaolack, Kaffrine, Tambacounda, Kolda and Ziguinchor.

The mutual institution belongs to nearly 200,000 Senegalese men and women and more than 20,000 groups.

Its presence in rural areas enables it to reach its target populations, primarily small producers, but also wholesalers, traders and larger producers, with a view to integrating agricultural value chains and scaling up.

Supporting VSE/SMEs owned or run by women

The operation qualifies for 50% of the 2 X Challenge, the initiative founded by the development finance institutions of the G7 countries to strengthen the economic role of women in the countries where they operate.

To date, 49% of ACEP SN's members and 46% of its customers are women, although women account for only 23% of loans granted. In order to develop women's entrepreneurship, ACEP SN has put in place measures to promote the financial inclusion of women: they can be helped to form groups, loan officers support them in the credit application process, provide them with training and grant them their first loans under a joint guarantee. When the members of the group have acquired sufficient experience and developed their individual activities, they can leave the group and obtain credit in their own name.

ACEP SN has also put in place a streamlined collateral system to encourage the granting of loans to women (who more rarely own collateral). For example, household equipment (which is not essential) is accepted as collateral for credit up to a certain amount. Targeting 50% of the funding (i.e. €5m) towards granting additional credit to women should provide an incentive to reduce the gap in the average loan size currently seen between women and men.

‘ At ACEP Senegal, we firmly believe that including women in entrepreneurship is not only beneficial for society, but also for Senegal's economic development. It should be noted that around 50% of our member customers are women. All these factors make promoting women's entrepreneurship one of ACEP Senegal's strategic priorities. This priority will be applied to various sectors of activity. With Proparco's support, the priority will be to support the agri-food sector, for which we see a prosperous and equitable future for all,’ confirms Souleymane Sarr, Managing Director of ACEP SENEGAL.

‘We are delighted to be able to support ACEP Senegal and its many members in their microfinance mission, particularly in the fight against food insecurity and gender inequality,’ says Sadio Dicko, Regional Director for West Africa at Proparco. ‘ These priorities are at the heart of our strategy ‘Acting together for greater impact ’, which focuses on ‘Investing in a sustainable and resilient economy’ and ‘Contributing to the reduction of inequalities’, in particular through the strengthening of local production and processing capacities, access to essential goods and services for the most vulnerable populations and the promotion of women's entrepreneurship.