Our solutions

Financial institutions

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Supporting financial institutions

The AFD Group offers financing solutions to local financial institutions (commercial banks, microfinance institutions and non-banking institutions, such as leasing, factoring and insurance companies) to expand the range of products and services adapted to the needs of small and medium-sized enterprises.

In addition to these financing solutions, the AFD Group offers advisory and assistance services to its partner financial institutions so that they can more effectively meet the financing needs of local SMEs.

Key figures

€

EUR 1.5bn

for microenterprises/SMEs in partnership with financial institutions

including EUR 600m

of credit lines allocated to financial institutions and earmarked for SMEs

and EUR 900m

of guarantees allocated to promote access to credit for microenterprises/SMEs

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Our financing solutions

Debt Instruments

  • Proparco offers financial institutions:
    • subordinated debt in EUR or USD for EUR 5m to EUR 25m for 5 to 10-year periods based on regulatory requirements. This Tier 2 debt aims to strengthen the equity of banks to assist their development in the SME segment
    • Senior loans for EUR 10m to EUR 100m (in EUR or USD) with a 4 to 12-year maturity to finance the development of the SME portfolio of banks.
    • Subscriptions of Social Bond issues, as defined by ICMA, with a use of funds earmarked for SME financing.

Strengthening equity

  • Proparco also invests in equity for a 5 to 8-year period, either directly (with average tickets of EUR 5m to EUR 25m for banks or leasing companies, EUR 3m to EUR 20m for microfinance institutions, and EUR 500,000 to EUR 3m for start-ups and FinTechs), or via investment funds dedicated to the financial sector.

Guarantee tools

  • We offer financial institutions risk-sharing tools to facilitate access to credit for microenterprises, SMEs and microfinance institutions via the following tools:
    • ARIZ: a final loss guarantee offered to financial institutions to cover 50% of an individual loan to an SME, 75% of an individual loan to a microfinance institution or 50% of an African SME loan portfolio
      Find out more
    • MENA facility (guarantee component): a risk-sharing mechanism for private financial institutions in North African countries (Algeria, Egypt, Morocco and Tunisia) and the Middle East
      Find out more
    • EURIZ: a final loss guarantee offered to financial institutions operating in the ACP (Africa, Caribbean and Pacific) region to cover up to 70% of loans to developmental SMEs or 50% of loans to SMEs in difficult areas
      Find out more
    • ARIZ TPE MINKA: a portfolio guarantee implemented by PROPARCO for financial institutions to allow them to cover up to 80% of loans to microenterprises/SMEs in certain crisis regions in Africa and the Middle East Find out more with an example
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Our support and advisory solutions

Technical and strategic assistance

  • In addition to financing, AFD Group also offers its partner financial institutions customized assistance to:
    • Amprove their practices (environmental and social management system, governance, reducing gender inequalities)
    • Develop products and services for SMEs
      • SME approach: development of specific financial services, risk assessment methodologies and an appropriate commercial approach, as well as the development of non-financial services (training, networking, coaching, etc.)
      • Products and services for SMEs in the agricultural sector
      • Products and services for energy efficiency and renewable energy projects for SMEs
    • Support their digital transformation
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Our emblematic projects

Country

Investment type

Our news

Proparco signs a loan with Société Générale Burkina Faso to...

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September 20 2019

The AFD Group supports social and inclusive businesses in South...

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June 14 2019

The AFD Group supports MSMEs in Zambia

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June 13 2019

Proparco signs its first project in Cape Verde to support...

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June 5 2019

A new Choose Africa project to support MSME development in...

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April 30 2019

Proparco’s first operation in Eswatini

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April 30 2019

Proparco supports the financial sector in Niger

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March 27 2019

FirstRand Bank : Proparco grants a new credit line to...

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August 3 2018