New partnership between Proparco and Société Générale Moçambique to support Small and Medium Enterprises
Proparco’s grant of a portfolio guarantee to Société Générale Moçambique will enable the bank to increase its SME financing activity. This high-impact operation confirms Proparco’s as well as Société Générale Moçambique’s commitment to support entrepreneurs and the private sector in fragile countries.
The EURIZ portfolio guarantee granted to Société Générale Moçambique covers an amount of 3 million euros. It will allow to share the risk associated with financing of very small, small and medium-sized enterprises (VSEs), thus increasing the bank's ability to finance the economy. MSMEs owned by women and those active in the agricultural sector will be particularly targeted.
Launched in May 2019 with the support of the European Union and the European Development Fund, and the African, Caribbean and Pacific Group of States (ACP), the EURIZ guarantee aims to facilitate access to credit for SMEs, in particular in sectors with a high development impact, in order to help them play their essential role in economic growth and job creation.
This initiative demonstrates the priority accorded by Proparco to support the private sector in fragile countries, particularly in high-impact sectors. By supporting women entrepreneurs, this project contributes to the achievement of Sustainable Development Goal 5 (Gender Equality) and to 2XChallenge, initiative of a group of development finance institutions to promote gender equality.
“Proparco is pleased to be able to count on a key partner like Societe Generale to support SMEs in a country where financial inclusion remains a huge challenge. By targeting women entrepreneurs and the agricultural sector, this project addresses important development challenges and has major impacts for Mozambique”. said Siby Diabira, Regional Director of Proparco for Southern Africa.
Societe Generale Group has launched a strategic program called Grow with Africa which aims at growing the support of SMES notably by increasing the Group’s credit to SMEs by 4 billion Euros. The Group believes that SMEs are at the heart of the African economy, so it encourages the development of innovative financial solutions adapted to local markets.
“The partnership signed today between Société Générale Moçambique and Proparco, will facilitate the access to credit to SMEs, in particular in sectors with high impact in the development of Mozambique, with a more specific focus in agribusiness which is already one of the key sectors of the bank. The line will also support women entrepreneurship by supporting business owned enterprises or associated participation” said Sterghios Dassarecos, Chief Executive Officer of Société Générale Moçambique.
He continued stating that, “After 5 years of operations in the Mozambican market, Banco Société Générale Moçambique reiterates with this action its ambition to be a reference bank in this market and an active partner in the development of the local economy, by supporting SMEs, especially in today’s context, were these companies face difficulties resultant from the world pandemic crisis.”
Supporting African small and medium-sized enterprises, a priority for France and the AFD Group
This first operation between Société Générale Mozambique and the AFD Group further strengthens the historic relationship that unites the AFD and Societe Generale groups on the African continent. It is part of the French initiative Choose Africa which aims to allocate €3.5 billion to finance and support start-ups, small and medium-sized enterprises in Africa over the period 2018-2022. Societe Generale is a key partner in this initiative, being the first financial institution to deploy a nouvelle offre exceptionnelle de prêts garantis à 80% par le Groupe AFD dans 4 pays africains.
More than €2 billion have already been committed by AFD and Proparco under Choose Africa. More than 16,000 start-ups and SMEs, as well as tens of thousands of micro-entrepreneurs on the continent, will benefit from this funding over the next few years.
David Izzo, French Ambassador in Mozambique, added: "The European Union and its member states are Mozambique's leading development partners in all sectors. As such, the EU also plays a key role in this initiative as the guarantee granted to Société Générale Moçambique is supported by the Union and the European Development Fund. The emphasis on the agricultural sector, which employs the majority of the active population, and on women, is in line with France's diplomatic priorities, which are feminist and oriented towards African youth.”