N'Djamena, Chad, July 21, 2023—IFC has joined forces with Express Union Tchad (EUT), a leading microfinance institution in Chad, to boost access to finance for underserved communities—particularly women and those in rural areas, bolster the microfinance sector, and help drive economic growth.
Under the partnership, IFC will provide up to 1.87 billion Central African CFA franc (or approximately $3 million) to EUT, the country's second-largest microfinance institution. The financing comprises up to 630.7 million Central African CFA franc (or approximately $1 million) from IFC's own account and 1.24 billion Central African CFA franc (approximately $2 million) in mobilization. The project is expected to grow its loan portfolio by 75% over three years.
IFC's investment will provide a competitive long-term local currency facility not readily available in the market and help EUT grow its lending business by diversifying its funding base, which has traditionally relied on short-term deposits. IFC will also help strengthen EUT's corporate governance, risk management procedures, and management of environmental and social risks.
"One of the priorities of Express Union Tchad's 2023/2026 strategic development plan is the development of financial intermediation. This loan will therefore enable Express Union Tchad to strengthen its financial capacity to meet the financing needs of micro, small and medium-sized enterprises (MSMEs) and low-income households, to boost job creation and accelerate financial inclusion,' said Dongmo Djumazong Ebenezer, Express Union's General Manager.
Financial exclusion remains a major challenge in Chad, with the country still recovering from the impact of the COVID-19 pandemic. In 2022, only 24 percent of adults had access to a formal transaction account and just 10 percent to credit, compared with 55 percent and 14 percent across sub-Saharan Africa, respectively.
"To boost entrepreneurship and drive sustainable economic growth, we need to ensure that everyone can access the funding they need for their businesses. Our aim is to enable Express Union to broaden its scope of action to help meet the financing needs of households, including women, in the most remote parts of the country," said Sylvain Kakou, IFC Chad Country Manager.
IFC's investment is part of its Base of the Pyramid (BOP) Program, which enables financial intermediaries to support their individual and MSME clients, reducing the impact of the pandemic on economic growth and livelihoods. It is supported by the International Development Association's Private Sector Window Blended Finance Facility.
About IFC
IFC—a member of the World Bank Group—is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries. In fiscal year 2022, IFC committed a record $32.8 billion to private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity as economies grapple with the impacts of global compounding crises. For more information, visit www.ifc.org.
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About Express Union Tchad
Express Union Tchad (EUT) is a subsidiary of Express Union Group, a holding company with shareholdings in microfinance and money transfer institutions in West and Central Africa. EUT obtained its microfinance license in 2006 and started operating in 2007 with the objective to improve the living conditions of financially excluded populations in Chad by providing domestic and international money transfer services, and loans and savings products. EUT enjoys a strong brand recognition in the market and effectively serves its clients through its large network of 38 branches in 18 out of 23 regions in the country.
About the IDA Private Sector Window
The International Development Association's (IDA) Private Sector Window (PSW) was launched in 2017 to catalyze private sector investment in the poorest and most fragile countries. Recognizing the key role of the private sector in achieving IDA's objectives and the World Bank Group's twin goals, the window provides a source of co-investment funding and guarantees to de-risk private investments supported by IFC and the Multilateral Investment Guarantee Agency (MIGA). The IDA PSW is an option when there is no commercial solution, and the World Bank Group's other tools and approaches are insufficient. For more information, visit: http://ida.worldbank.org/psw
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