Senegal: COFINA Senegal funds agricultural SMEs with EIB and EU support

COFINA Senegal, under a partnership with the European Investment Bank (EIB) backed by the European Union, has announced that it has already granted over XOF 440 million (€675 000) to 57 SMEs, all in agricultural value chains: 14 in the horticulture sector and 35 in the cereals sector, two priority areas in the Senegal-EU partnership.

These loans are part of a financing agreement for €25 million (XOF 16.4 billion) concluded in September 2023 between COFINA Group (Compagnie Financière Africaine) and the EIB through EIB Global, the Bank’s development branch, which supports private sector firms in agricultural value chains. Of the €25 million in financing guaranteed by the European Union, COFINA Senegal will receive a total of €9.75 million (XOF 6.4 billion).

The partnership will sustain around 2 300 jobs in small and medium-sized enterprises (SMEs) and mid-cap companies in Senegal.

This agreement includes ambitious objectives for climate action, environmental sustainability and financial inclusion – in particular of women, as entrepreneurs, managers, employees and consumers of products and services, increasing their economic participation in line with the 2X Challenge initiative. It will allow COFINA Group, as a meso-finance institution, to increase the support it provides to help develop agricultural value chains, in particular in cereals and horticulture, two priority areas in the partnership between the European Union and Senegal.

In supporting the agricultural sector, this financing will serve to reduce dependence on imports, increasing Senegal’s food sovereignty and general economic stability while encouraging environmentally friendly agricultural practices, the adoption of modern technology and job creation in rural areas.

Meet some of the first firms to benefit from this financing:

•  Wakeur Cheikh Abdou Karim Agro is a company created in June 2019 by Ahmadou Dème, specialising in the production and sale of produce, especially onions. Based in Pout (Thiès), the company has cultivated more than 85 acres of land this season, and has 150 tonnes of onions in inventory. It has modern irrigation equipment, storage facilities for 1 000 tonnes of inventory and its own means of logistics and distribution. It received financing of XOF 30 billion from COFINA to build a new storage facility in order to increase capacity and improve profitability.
• Khady Sow is an agricultural entrepreneur. Since 2016, she has been running a farm in Diogo (Thiès) and a shop selling farm products in Yoff (Dakar). With her innovative strategy of selling on social media, she targets households and small resellers, distributing up to 300 bags of vegetables a day. Thanks to financing of XOF 8 billion from COFINA, she was able to expand her shop and create jobs, especially for women in Diogo.
• Rokhaya Kane is a poultry expert with more than 20 years of experience, who has also been farming rice on five acres of land in Saint-Louis since 2021. She started working out of her home with just 15 chickens. Today, she manages production of 5 000 birds per month, across five poultry houses. A loan of XOF 3.5 billion from COFINA has allowed her to expand her business to meet the growing demand, creating new jobs locally and stimulating the Saint-Louis economy.
• The Société Coopérative Mutualiste Multifonctionnelle de Diokhar Ndoffène is a cooperative managed by Yafane Faye. It has 74 members that produce millet, maize and peanuts on around 250 acres of land. Founded in March 2022, it is located in Diokhar Ndoffène, Mbour. Thanks to financing of XOF 3.91 billion from COFINA, the cooperative could increase its farming production, making it more competitive on the local market.
• Serigne Mourtalla Ndiaye, a farmer based in Bayakh (Thiès), got his start in agriculture in 2004 as a farm worker before opening his own five-acre vegetable farm, including five greenhouses and a nursery with 109 000 plants. Thanks to financing of XOF 5 billion from COFINA, he was able to expand his chilli pepper production and create local jobs, fostering the economic inclusion of women in the Bayakh community.

 “This partnership with the EIB aligns directly with our objectives for financial inclusion. With this financing, COFINA Senegal is providing more support for women as entrepreneurs, employees in the workforce, and managers, through its specialised Linguère-La branch. It is also facilitating credit access for thousands of farmers and entrepreneurs via its Agri desk, which was created especially for players in agricultural value chains, thereby driving innovation, productivity and sustainability in the agricultural sector. This agreement allows us to offer favourable financing conditions, with lower interest rates and payment periods tailored to agricultural production cycles,” said Mame Alassane Dia, General Director of COFINA Senegal.

“I am happy that the EIB is backing such an important project for the development of agricultural value chains, including horticulture and cereals in Senegal. What’s more, this financing agreement includes ambitious targets on climate action, environmental sustainability and women’s financial inclusion. It also strengthens food sovereignty and reduces dependence on imports, while promoting the use of modern technology and job creation in rural areas,” said EIB Vice-President Ambroise Fayolle. “It reflects our desire to support projects with a real impact on people – especially for women and youth, and in priority areas for the country’s development.”

“This partnership is aligned with the Global Gateway strategy and aims to support the country’s food sovereignty, an objective that the Senegalese government has made a priority,” explained EU Ambassador to Senegal Jean-Marc Pisani. “Increasing access to finance for SMEs and mid-caps in a sustainable and inclusive manner is indispensable for improving productivity in the sector. It allows all players to fully utilise their potential and create a virtuous investment cycle, two things that are essential for inclusive and sustainable economic growth. Another hugely important aspect is the focus on women, who are key sector players,” he added.

 

Background information

About the European Investment Bank

The EIB is the lending institution of the European Union, owned by the Member States. It provides long-term financing for sound investment projects to achieve EU policy objectives.

The EIB has been a strong partner for African countries for 60 years. Through EIB Global, the Bank is strengthening its presence in Africa. Over the last five years, the EIB has invested €12 billion in Africa – 25% of which went to West Africa – with the goal of financing projects in key areas for African countries such as clean energy, water and sanitation, sustainable transport, affordable housing, healthcare and support for the private sector and project promoters.

EIB Global is the EIB Group’s specialised arm devoted to increasing the impact of international partnerships and development finance. It is designed to foster strong, focused partnerships within Team Europe, alongside fellow development finance institutions and civil society. EIB Global brings the EIB Group closer to local people, companies and institutions through our offices around the world.

Website: www.eib.org

https://twitter.com/EIBGlobal

https://www.linkedin.com/company/eib-global/

About COFINA Senegal

COFINA is the leading African financial institution for meso-finance, the “missing middle” between microfinance and traditional banking that provides easier access to credit for SMEs. With branches in eight African countries (Burkina Faso, Congo, Côte d’Ivoire, Gabon, Guinea, Mali, Senegal and Togo) and one serving the diaspora in France, COFINA Group has established itself as a market leader for supporting entrepreneurs and SMEs in West and Central Africa. By providing its customers with meso- and micro-loans, insurance and bancassurance products, mobile banking and e-banking products, social housing financing and structured financing, and operating according to international standards, COFINA supports entrepreneurs and SMEs whose financing needs have become too great for microfinance institutions, but are not sufficiently structured for traditional banks.

About the European Union’s priorities in Senegal

The European Union’s priorities in Senegal are based on several strategic pillars, with the goal of supporting sustainable development and stability in the country. The European Union aims to contribute to stability, prosperity and well-being in Senegal. By making major green investments, it is focusing its efforts on inclusive and sustainable economic development, while also strengthening key sectors like agriculture, energy, the pharmaceutical sector, urban mobility, the digital sector, and water and wastewater, as well as professional training, entrepreneurship and job creation, particularly for young people and women. It places special importance on promoting good governance, the rule of law and human rights. This is in line with and implements the Global Gateway strategy, launched in 2021 with the goal of forming sustainable and reliable connections to benefit people and planet. This EU strategy aims to develop smart, clean and secure links in the digital, energy and transport sectors, and to strengthen health, education and research systems across the whole world.

With the new Neighbourhood, Development and International Cooperation Instrument, also known as Global Europe, Team Europe – the European Union, its Member States (including their implementing agencies and public development banks) and the EIB – are mobilising the private sector to promote local added value, sustainable growth and job creation. In identifying, co-financing and carrying out concrete projects, the private sector plays a key role in operationalising this strategy on the ground.