Abidjan, Côte d'Ivoire, July 3, 2023 – To enable even the smallest businesses in West Africa to access the financing they need to grow, IFC today announced a partnership with Orange Bank Africa (OBA), Orange Group's digital bank, which will help thousands of businesses, including those in rural and underserved areas, access loans and micro loans online.
Under this innovative partnership, IFC will provide a risk-sharing facility to help OBA scale its digital lending operations to micro, small, and medium-sized enterprises (MSMEs) in Côte d'Ivoire and then to Senegal and other parts of West Africa once OBA has a license to operate in those countries.
The facility will guarantee 50 percent of a portfolio of eligible short-term loans of up to the local currency equivalent of $30 million originated by OBA to MSMEs, enabling OBA to provide an estimated additional 300,000 loans by 2025.
The risk-sharing facility is IFC's first designed specifically for digital loans globally. This type of loan greatly expands financial inclusion because borrowers can apply from anywhere, avoiding the need to visit a bank branch or provide lengthy documentation.
"Partnering with IFC allows us to increase resource mobilization for sub-regional development. By pooling our expertise to accelerate the financing of micro, small, and medium-sized businesses through concrete solutions, we contribute to improving their productivity, increasing their competitiveness on local and international markets, and creating jobs," said Jean-Louis Menann-Kouamé, CEO of Orange Bank Africa.
"This innovative investment demonstrates our strong commitment to leveraging the power of digital financial services, especially in regions where financial inclusion remains limited, and has the potential to set a precedent in digital lending," said Olivier Buyoya, IFC Regional Director for West Africa. "Partnering with OBA, a unique bank in French-speaking West Africa, also aligns with IFC's strategy to promote inclusive finance and contribute to the deployment of digital infrastructure and digital economy solutions in the region."
The partnership between IFC and OBA builds on an advisory program launched in 2022 to help OBA develop its strategy and product offering for MSMEs, including mobile money agents and merchants in Côte d'Ivoire. Going forward, IFC will continue to provide OBA with advisory services to strengthen its risk management procedures, further enhance its digital product offering, and improve customer experience.
Although West Africa has recently improved financial inclusion, MSMEs in the region still identify financing as a major obstacle to growth. According to the World Bank Group's MSME finance gap report, 63 percent of MSMEs in Senegal and 57 percent in Côte d'Ivoire experience constraints when accessing a loan or line of credit.
IFC's support will help OBA reach underserved segments such as women-owned businesses, young entrepreneurs in rural areas, and entrepreneurs in creative industries. The risk-sharing facility will also enable OBA to increase its lending to mobile money agents and to merchants who accept digital payments, supporting the growth of these small businesses and the development of the sector as a whole.
IFC's investment is backed by the International Development Association's Private Sector Window Blended Finance Facility, which provides first-loss guarantees in low-income countries.
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 the IDA Private Sector Window
The International Development Association's (IDA) Private Sector Window 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
About Orange Bank Africa
Orange Bank Africa was established out of a partnership between the Orange Group and the banking and insurance group NSIA Banque, two leading players in their respective markets. The fully digital bank is committed to strengthening financial inclusion in the UEMOA zone, with the aim of improving the quality of life of the population. It offers people access to innovative and simple solutions based on mobile services. One of its flagship products, the Tik Tak loan, allows customers to receive up to 1,000,000 CFA francs in less than 10 seconds into their Orange Money account. Orange Bank Africa relies on the Orange Group's expertise in financial services, demonstrated since 2008 by the success of Orange Money in over 17 African countries. Based in Abidjan, Côte d'Ivoire, the Orange Group's digital bank aims to extend its presence in the near future to the markets of Senegal, Mali and Burkina Faso.
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