Madagascar is the first country to benefit from loans guaranteed at 80% by AFD Group, made possible thanks to the resources specifically allocated by the French State in favor of MSMEs in Africa. The financing will be distributed by Société Générale Madagasikara to MSMEs affected by the crisis.

Baobab Banque Madagascar has signed a €2 million portfolio guarantee with Proparco. The agreement enables Baobab Banque Madagascar to share the risks associated with its microfinance business. As a result, the bank will be able to step up its financial inclusion efforts among the micro-enterprises that provide a livelihood for the country's vulnerable urban populations.

To meet the needs of MSMEs affected by the crisis on the African continent, Proparco has set up an exceptional guarantee to cover part of the financing that financial institutions can grant them. Société Générale, a long-standing partner of the AFD Group and a key player in private sector financing in Africa, is the first financial institution to partner with Proparco to deploy this mechanism.

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.

On the occasion of the French Presidency of the Council of the European Union, which began on January 1 and ends on June 30, 2022, Proparco and the European Union (EU) are continuing their partnership with the granting of a line of credit equivalent to €5 million in ariary to the Malagasy microfinance bank, AccèsBanque Madagascar (ABM). This line of credit will be guaranteed by funds from the European Fund for Sustainable Development (EFSD), the EU's private sector support tool, implemented by Proparco. The Currency Exchange Fund N.V. (“TCX”) is providing the currency hedge that eliminates the FX risk of the credit line. With its “EU Market Creation Facility – Pricing Component”, which also benefits from an EFSD guarantee, TCX can offer the hedge at concessional pricing in sub-Saharan countries.

In recent years, the concept of social business has emerged as a middle road between philanthropy and the pursuit of maximum profit. The idea is rooted in a dual realization: on the one hand, governments and civil society are striving – especially in poor countries – to resolve problems such as food insecurity and insufficient access to healthcare, water, energy and adequate housing. On the other, the principle of maximizing profits is showing its limitations by intensifying pressure on resources, contributing to global warming and widening social inequality.

Proparco has granted a subordinated loan (eligible for treatment as quasi equity) to BNI MADAGASCAR - one of the country's leading commercial banks – to help partner the bank's development and provide finance for the local economy. This first new transaction since 2009 marks Proparco's renewed commitment to developing Madagascar's private sector.

Local branch Proparco in Madagascar

This article was published in Jeune Afrique in December 2019.

Against a backdrop of the three-fold increase in regional traffic over the past 15 years and the saturation of capacity at Antananarivo’s international airport, this loan is part of a global investment by Ravinala Airports to upgrade the infrastructure of the two airports.

Proparco will sign a 10 million euro loan with BNI MADAGASCAR in the coming days to strengthen the bank's equity and support its sustainable growth strategy in Madagascar.