This outreach is worth it. Trust Merchant is now represented in all provinces, in many rural areas and cities, with dozens of branches. Its initial capital of $1.5 million in 2004 has grown to more than $100 million in equity today. It has 2.7 million bank accounts, and added 400,000 accounts during the pandemic. Sixteen years ago, when the bank began, there were only about 40,000 bank accounts in the country and most were held by wealth elites or expatriates, McEvoy says.
Urgent help during the pandemic
The European Investment Bank’s loan will enable Trust Merchant Bank to give several thousand loans of around $4,000 to $5,000 each to micro-firms and small businesses that need money to pay employees, buy supplies and cover other expenses during the pandemic. These companies will get loans with a fair interest rate, rather than the 30% to 40% interest a month they would pay to an “informal lender” in Congo. Sectors that will get new loans include food production, logistics, hospital care, small-scale information technology firms and farming.
“These sectors may not make a huge contribution to the gross domestic product of the country,” McEvoy says, “but they are a big help to the livelihood of the communities where people live.”
The EIB also intends to offer a loan guarantee of €30 million to give Trust Merchant Bank more power to approve new loans to small and medium-sized firms. The loan is part of the European Investment Bank’s rapid response package for the pandemic, and the guarantee would come from a European Union finance initiative for small companies. This assistance mainly will support TMB’s outreach efforts with thousands of small enterprises in Congo.
In total, the European Investment Bank is offering up to €200 million to help west and central Africa fight the crisis, especially targeting the private sector and small companies. The EU bank plans to mobilise more than €100 billion in investment in Africa this decade.
The European Investment Bank also signed a loan deal with Trust Merchant Bank in 2018 for €15 million.
“We are letting TMB give longer-term financing to more people across Congo,” says Schulte, the EIB loan officer. “The problem in some African countries like Congo is that banks often provide primarily short-term loans to their clients to give them working capital. With this new credit line, the EIB is helping TMB offer more lending for clients’ long-term capital investments. This is done by giving TMB long-term financing in addition to its short-term deposit financing that comes from their clients.”