IFC and Baobab Group Collaborate to Enhance Financial Access for Enterprises

IFC announced a new partnership with the Baobab Group that will strengthen the provision of financial services to unserved and underserved entrepreneurs, particularly micro and small enterprises and women-owned businesses in Burkina Faso, Côte d’Ivoire, the Democratic Republic of the Congo, Madagascar, Mali, and Senegal.

Under this partnership, IFC has signed six loan agreements as part of a multi-currency facility with the Baobab Group for a maximum of $47.5 million. Extended under the Bottom of the Pyramid platform, which aims to mitigate the economic effects of the COVID-19 pandemic, the facility will assist micro, small, and women-owned businesses in gaining access to the capital they need to operate and expand.

“This new partnership with IFC will support our strategy to strengthen our leadership in larger markets, such as Côte d’Ivoire and Senegal, and to pursue growth in markets that are currently more fragile, such as Burkina Faso, Mali, and the Democratic Republic of the Congo,” said Baobab Group CEO Philip Sigwart.

This facility represents a new chapter in IFC’s long-standing partnership with the Baobab Group, one of the first microfinance institutions in Africa to implement IFC’s Microfinance Initiative in 2005. Since that time, IFC, a founding shareholder of the Group, has provided debt and equity support to its subsidiaries in Africa and China, as required.

This new partnership seeks to assist the Baobab Group in expanding its financial operations in several Sub-Saharan African nations.

“This new initiative will allow IFC to reach numerous financial inclusion operators in Africa in an efficient and innovative manner. In the aftermath of the COVID-19 crisis and multiple climate shocks, it will also help extend access to finance for micro and small enterprises and women, according to Aliou Maiga, IFC’s Regional Industry Director for the Financial Institutions Group in Africa.

In sub-Saharan Africa, micro- and small-sized businesses are essential to the expansion of the private sector. Nonetheless, they continue to be impacted by rising inflation and supply chain disruptions, partly as a result of the pandemic’s lingering effects and Russia’s invasion of Ukraine. A significant decline in business growth threatens an inclusive and resilient recovery.

IFC financing is supported by the Private Sector Window Blended Finance Facility and Local Currency Facility of the International Development Association.