Around 77 000 loans, local currency financing and longer-term investment expected to be unlocked
€4 million in financing targeting women
EIB backing for Vital Finance Benin to tackle “missing middle” between microfinance institutions and banks
First Benin partnership under EIB’s €50 million West Africa microfinance programme
The first ever loan from the European Investment Bank (EIB) to Vital Finance Benin will promote investment by small businesses and support thousands of jobs across Benin. The new financing programme announced today will specifically target the country’s female entrepreneurs, who are expected to account for 70% of final beneficiaries.
This is the first cooperation between the EIB, the world’s largest international public bank owned by the 27 EU Member States, and Vital Finance Benin, the third-largest microfinance provider in the West African state.
“Vital Finance Benin understands the investment priorities and financial challenges facing businesses in our country. Our new partnership with the European Investment Bank will enable Vital Finance to continue expanding and helping businesses in Benin to create jobs. My colleagues and I look forward to building on our new relationship with the EIB to enhance access to finance in Benin and help small business owners improve the business skills they need to succeed,” said Wakil Adjibi, CEO of Vital Finance Benin.
“Ensuring that businesses can expand and create jobs is crucial. The European Investment Bank is committed to supporting private sector enterprise in Africa and we are pleased to have agreed our first operation with leading microfinance institution Vital Finance Benin. The EIB’s first operation in Benin under our West Africa Microfinance Facility will back thousands of loans, generate investment in local currency and help overcome the investment gap between banks and microfinance institutions through medium-sized loans,” said EIB Vice-President Ambroise Fayolle.
“The European Union is committed to supporting transformational private sector investment that strengthens sustainable development in Benin. This first cooperation between the EIB – the EU bank – and Vital Finance demonstrates Team Europe’s strengthened commitment to ensuring that partners in Africa can better address the challenges of sustainable development across the continent. Improving access to finance for small businesses will provide new opportunities for female entrepreneurs and young people across the country,” said Sylvia Hartleif, Head of the EU Delegation in Cotonou.
Reducing the economic and social impact of COVID-19 in Benin
The EIB’s new partnership with Vital Finance Benin will help improve access to finance for the businesses most impacted by the COVID-19 pandemic and enable continued lending to micro-enterprises.
In Benin and across Africa, businesses have been hit by border closures, restricted imports and sudden challenges in export markets.
Enhancing investment by removing local currency risks
The new EIB funding for Vital Finance Benin will be provided entirely in local currency, with the equivalent of €4 million in CFA francs, and will be supported by the EIB’s dedicated impact finance programme.
Addressing the “missing middle” financing gap between microfinance and banks
The new partnership will enable Vital Finance Benin to provide loans that are larger than credit traditionally provided by microfinance institutions and too small for local banks. Known as mesofinance, this solution will help to overcome the “missing middle” investment gap that holds back expansion by small businesses.
Sharing financial experience and strengthening business skills through technical assistance
The new EIB support for microfinance in Benin will include technical assistance to share risk management and human resources best practices from across Africa with Vital Finance Benin. Entrepreneurs in Benin will also benefit from dedicated training to improve business skills and financial planning.
Building on the EIB’s support for private sector investment across Africa
Last year, the EIB provided more than €1.8 billion to support private sector investment across Africa, representing 60% of its overall commitment on the continent.
This included €500 million of financing to help African startups in digital technology, agribusiness, financial inclusion and health services.
EIB cooperation with new corporate, banking and microfinance partners in Africa is providing specialist financing for smallholders, removing local currency costs holding back investment and helping private companies invest in climate adaptation.
New private sector financing programmes have been agreed with leading local banks and microfinance partners that include specific measures to reduce gender inequality, provide long-term financing in local currency and offer tailor-made financial products for agribusiness.
VITAL FINANCE is a leading microfinance institution in Benin that provides direct financing to micro, small and medium-sized enterprises.
Established in 1998, over the past 20 years it has built up a network of around 20 branches across the country.
Founder and CEO Wakil Adjibi launched this initiative as part of a study highlighting the enormous potential of the market and sector, in which it was found that needs were far from being met by the existing organisations.
The European Investment Bank (EIB) and Plan International are partnering with One World Media to celebrate underreported stories on development issues around the world that shatter stereotypes, change the narrative and connect people across cultures.
Highly-advanced, specialised machining tools and equipment are essential to improve energy efficiency performance and reduce waste in industrial sectors such as component manufacturing, mining and infrastructure. The development of such solutions is cost-intensive yet necessary to keep technology at the forefront, and thereby secure jobs and the economy. The European Investment Bank (EIB) today announced that it has provided a €500 million loan to the leading machining, mining and rock processing solutions company Sandvik for research and development investments.
The European Investment Bank (EIB) and the PUNCH Group, a leading innovative Belgian mid-cap developing propulsion and control systems for hybrid and electric vehicles, have signed a €40 million finance contract in support of the company’s research, development and innovation (RDI) activities. The investments will be made mainly at the company’s headquarters in Turin (Italy) and, to a lesser extent, in Strasbourg (France).