This guarantee, made possible thanks to the support of the French government, enables Société Générale's subsidiaries on the African continent to amplify their support for entrepreneurs. Cameroon, Côte d'Ivoire, Madagascar and Senegal are the first countries to benefit from this loan offer which is 80% guaranteed by the AFD Group.
The economic crisis generated by the covid-19 pandemic is severely affecting small and medium-sized enterprises in Africa, affecting their ability to innovate, create jobs, and provide essential goods and services.
In line with the Prêt Garanti d'Etat or PGE (State Guaranteed Loan) set up in France to help businesses overcome the crisis, the French governement has provided AFD Group with a 160 million euro State guarantee for MSMEs on the African continent. The partnership signed with Société Générale focused on the deployment of this guarantee in several African countries.
After review of their requests for financing, companies with less than 200 employees affected by the crisis may be able to receive loans ranging from 12 to 48 months. These loans, which may represent up to 3 months of their 2019 revenues, will be 80% guaranteed by AFD Group.
This guarantee offer, made possible thanks to the resources specially allocated by the French State for MSMEs in Africa, is a key tool in the Resilience component of the French Choose Africa initiative dedicated to supporting start-ups and MSMEs in Africa. Announced on November 30th in response to the crisis, this Resilience component brings France's commitment to entrepreneurs on the continent to €3.5 billion over the 2018-2022 period. Choose Africa mobilizes a wide range of tools: loans, guarantees, equity investments, technical support, etc.
A new dimension given to the partnership between AFD Group and Société Générale
AFD Group and Société Générale have built up a very close relationship over the years, which has resulted in the signature of numerous credit lines, guarantees and technical assistance solutions. For more than 10 years, Société Générale Group has been one of the main beneficiaries of the ARIZ risk-sharing mechanism proposed by AFD Group to develop business financing in Africa.
"The quality of the partnership between AFD Group and Société Générale, as well as the experience acquired by our two institutions in the financing and support of small and medium-sized African companies, are key assets in the current context. The support of the French State enables Proparco and Société Générale to amplify their joint commitment to entrepreneurs and to provide a response tailored to the needs expressed on the African continent" said Gregory Clemente, Chief Executive Officer of Proparco.
"For many years, Société Générale has made multi-dimensional support for SMEs one of the key aspects of its strategy in Africa, with the aim of contributing to African development in a responsible and sustainable manner. African SMEs are currently weakened by the economic impact of the crisis, but they remain the future of Africa because they meet several of the continent's long-term challenges, particularly those of job creation and innovation. It is therefore natural for Societe Generale to be one of the first players to deploy this new system for entrepreneurs," commented Laurent Goutard, Head of the Africa, Mediterranean & Overseas Region, International Retail Banking at Societe Generale.