Islamic Trade Group Supports Burkina Faso With €20m To Boost Private Sector

Posted by African Examiner African News, Business News, Featured, Latest Headlines, News, News Around Africa Saturday, July 3rd, 2021

(AFRICAN EXAMINER) – The International Islamic Trade Finance Corporation (ITFC), a member of the Islamic Development Bank (IDB) Group, has provided €20 million to further strengthen private sector development in Burkina Faso.

This is coming under the aegis of ITFC’s Murabaha financing agreement with Coris Bank International (CBI), which is aimed at improving access to trade lines of finance for the private sector players in the West African nation.

This latest agreement marks the fifth of its kind between ITFC and CBI for a total of more than US$62 million, which in addition to driving private sector development also serves to promote Islamic finance in the West African region.

In 2018, ITFC and the Government of Burkina Faso signed a five-year US$1.5 billion framework agreement to drive trade development in the country. Since 2008, ITFC has approved a total of US$2 billion in trade financing towards the country.

ITFC was established with the primary objective of advancing trade among Organisation of Islamic Corporation (OIC) member countries, which would ultimately contribute to the overarching goal of improving socioeconomic conditions of the people across the world.

Commencing operations in January 2008, the corporation has provided US$55 billion of financing to OIC member countries, making it the leading provider of trade solutions for these member countries’ needs.

Moreover, it helps entities in member countries gain better access to trade finance and provides them with the necessary trade-related capacity building tools, which would enable them to successfully compete in the global market.

The €20 million agreement is part of the West Africa SMEs Programme, a flagship program of ITFC aimed at improving access to finance for SMEs in the region by providing them, as well as partner banks, with credit and capacity building facilities.

Meanwhile, it is estimated that SMEs represent 90 percent of businesses and provide 80 percent of private sector jobs in West Africa. However, they often struggle to convince financial institutions of the creditworthiness of their businesses and financing requests.

ITFC’s West Africa SMEs Programme enables entrepreneurs in the region to strengthen business viability by accessing capacity development training in the crucial areas of accounting and finance, business plan development, and management best practices amongst others. In tandem, it deploys assistance to banks to strengthen SME lending practices and modernize assessment tools and lending processes.

The programme is focused on the West African Economic and Monetary Union (WAEMU) zone, which in addition to Burkina Faso includes Benin, Côte d’Ivoire, Guinea-Bissau, Mali, Niger, Senegal, and Togo.

Chief Executive Officer (CEO) of ITFC, Eng. Hani Salem Sonbol, reaffirmed the importance of the private sector in the corporation’s overall trade finance and development focus for the region.

“The private sector is the key to socio-economic transformation, and is at the heart of ITFC’s strategy for the development of member countries. In Burkina Faso, where the initial pilot initiative was rolled out in 2018, the West Africa SMEs Programme has already proven to be beneficial in reducing the trade finance gap for local businesses by enhancing entrepreneurial capacity and increasing their business viability”, he said.

This latest financing, according to him, will further boost the nation’s efforts to diversify its economy and strengthen private sector growth.

Similarly, the Managing Director of CBI, Mr. Diakarya Ouattara said his organization has been a key partner in the implementation of the West Africa SME Programme since it was piloted in Burkina Faso.

“The programme has benefitted local SMEs to build capacity and at the same time enabled CBI to strengthen our SME lending practices. The result is the development of a stronger SME sector, which is fundamental to the economic future of the country”, he stressed.