Mali and the EIB sign $10.8 billion loan agreement

The Union of Mutual Savings and Credit Unions of Mali (Africa) “Kafo Jiginew” and the European Investment Bank signed, a loan agreement estimated at  $10.8 billion (CFA6.5 billion), on Monday, February 24th, 2020 at the headquarters of the financial institution. Through this signature, more than 60,000 microcredits should be granted to small farmers. It is expected to finance nearly 15,000 people. This is a logical continuation of the growth in microfinance activities carried out by Kafo Jiginew, thanks to the first European Investment Bank financing that was received in 2001.

According to the Delegate Minister to the Minister of Economy and Finance, in charge of the Budget, Barry Aoua Sylla “It should be recognized that these micro and small family-type enterprises are real driving forces of socio-economic activities in Mali and can be a powerful sighthound for development and sustainable growth,” she acknowledged. The signing of the agreement took place in the presence of the head of the European Union cooperation in Mali, Géza Strammer, the PCA of Kafo Jiginew, Karim dit Karamoko Konaté, and other government ministers. This was followed by a press conference.

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The loan to help transform access to financing

Worth $10.8 billion (CFA6.5 billion), this loan will help transform the access to financing provided by Kafo Jiginew, according to the EIB’s regional representative in West Africa. “Kafo Jiginew has long maintained the trust of its clients and they have also earned and maintained our confidence with the partnership we are renewing today.”

Thus, the European Investment Bank will provide the savings and loan bank with long-term resources to support the development of its financing activities. Through this signature, more than 60,000 micro-credits should be granted to small farmers. Almost 15,000 people are expected to be financed.

The European Investment Bank will provide long-term funding to Kafo Jiginew in local currency, CFA Francs. Because of this, costs and uncertainties of managing a foreign currency loan for local currency lending will be avoided.

Cafo Jiginew congratulate the technical and financial partners

For his part, the director of CAFO JIGINEW did not fail to congratulate the technical and financial partners for their sense of responsibility but also for their relevance in the implementation of this convention signature. “This deserves to be commended as we know how great the challenge is for micro-finance to access quality financing to allow finance inclusive and sustainable growth. This financing is granted at 6%. The duration is seven years, with a two-year grace period,” he said.

In his speech, the Minister Delegate to the Minister of Economy and Finance, in charge of the Budget, Barry Aoua Sylla said that “the relevance of this agreement and its timeliness lies in its contribution to promoting income-generating activities through credits granted to micro, small and medium-sized individual, formal and even non-formal collective enterprises.”

The contract to supporting financing and economically profitable investments

It should be noted that the contract will be committed to supporting financing, economically profitable investments, investments that create added value and jobs in sectors with difficult access to bank credit in rural areas. These are essentially micro, small and medium-sized enterprises in semi-urban and urban areas, and women and young people. The agreement will support above all the economic development of Mali’s rural areas.

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(Featured image by Josh Appel via Unsplash)

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First published in Financial Afrik, a third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.

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