The European Investment Bank (EIB), the European Union's long-term financing institution, is to support the development of Banque des Institutions Mutualistes de l'Afrique de l'Ouest (BIMAO) using Investment Facility resources.
On 10 December 2005, under the chairmanship of the Directeur de Cabinet of the Ministry for SMEs, Microfinance and Female Entrepreneurship and in the presence of Mr Georges Coudray, Deputy Vice-Chairman of Crédit Mutuel Français, Mr Jack Reversade, the EIB's resident representative, and Mr Baba KOÏTA, Chairman of BIMAO, signed a framework guarantee agreement whereby the EIB will guarantee BIMAO's medium and long-term borrowings from local commercial banks up to a maximum of CFAF 3.28 billion (EUR 5 million).
The EIB's operation is in keeping with its new strengthened microfinance sector strategy embarked upon in conjunction with the European Commission and other development institutions. This first guarantee operation in favour of the microfinance sector will improve access to finance for people on modest incomes. It will help to promote the crafts and small-scale industry sector of the economy, in particular by underpinning an initiative that will lead to the strengthening and deepening of the domestic and regional financial market.
The EIB guarantee, which will have a maximum term of five years, will bolster BIMAO's ability to finance investment projects by mobilising financial resources that would not otherwise be available for the type of project in question. BIMAO acts entirely independently and applies its own decision-making criteria for assigning the EIB guarantee to its partners.
The EIB was set up in 1958 by the Treaty of Rome to finance capital investment projects that further the core objectives of the European Union (EU). It also participates in the implementation of the EU's cooperation policy towards third countries that have cooperation or association agreements with the Union. Currently, the Bank's loans in the African, Caribbean and Pacific (ACP) countries are granted under the Investment Facility, set up by the ACP-EU Partnership Agreement signed in Cotonou in June 2000. The total financial package available under the Cotonou Agreement amounts to some EUR 15 billion for 2002-2006, of which EUR 11.3 billion is grant aid from the EU Member States, EUR 2 billion is managed by the EIB under the Investment Facility and a maximum of EUR 1.7 billion is to be granted in the form of loans from the EIB's own resources. The Investment Facility is a revolving fund (the proceeds of loan repayments will be invested in new operations), aimed at supporting technically, environmentally, financially and economically sound projects in the private sector or commercially run part of the public sector.