The European Investment Bank (EIB), is lending EUR 9 million (1) (around CFAF 6 billion) from risk capital resources to five Senegalese financial institutions for funding ventures mounted by small and medium-sized enterprises (SMEs) in Senegal. The funds will be made available in the form of two global loans (2) advanced to four private commercial banks and a leasing company. The corresponding finance contracts were signed yesterday in Dakar by Mr Martin Curwen, Director of the EIB's Department for Lending Operations in the ACP States, on a visit to Senegal, and the Directors General of the five financial institutions.
A global loan for EUR 8 million has been granted jointly to Crédit Lyonnais Sénégal (CLS), Banque Internationale pour le Commerce et l'Industrie (BICIS), Société Générale de Banques au Sénégal (SGBS) and Compagnie Bancaire de l'Afrique Occidentale (CBAO) for financing medium and long-term loans to SMEs in the industrial, agricultural-processing, fisheries and tourism sectors.
A second global loan for EUR 1 million has been advanced to Société Financière d'Équipement (SFE), a company which has recently specialised in industrial plant and equipment leasing finance, a particularly useful instrument for meeting SME capital funding requirements. The credit line is earmarked for supporting operations of this kind in the same sectors as above.
Established in 1958 by the Treaty of Rome, the EIB finances capital investment projects which further European Union (EU) policy objectives. It also participates in implementation of the EU's cooperation policy towards third countries which have cooperation agreements with the Union. The Fourth Lomé Convention was concluded in 1989 for a duration of ten years, and is accompanied by two financial protocols spanning the periods 1991-1995 and 1996-2000. The second of these provides for a total financial package of EUR 14.6 billion, consisting of EUR 12 billion in grant aid from the EU Member States, EUR 1 billion in EDF(3) risk capital resources managed by the EIB, and up to EUR 1.6 billion in loans from the EIB's own resources.
(1) The conversion rates used by the EIB for statistical purposes during the current quarter are those obtaining on 1 January 1999, when EUR 1 = CFAF 656, FRF 6.55957, GBP 0.705455, DEM 1.95583, USD 1.16675.
(2) EIB global loans are lines of credit made available to financial institutions, which onlend the proceeds to finance small and medium-scale investment schemes meeting criteria agreed with the Bank. They combine the advantages of the excellent conditions to which the EIB has access on global capital markets with those of the partner banks' relations with and knowledge of the local business sector. Some sixty intermediary institutions in the ACP countries, signatories to the Lomé Convention, are currently managing EIB global loans.
(3) The European Development Fund (EDF) is comprised of contributions from the EU Member States. The EIB manages under mandate part of the EDF's resources, which it deploys primarily in risk capital operations.