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IFC, a member of the World Bank Group, today announced an investment of up to XOF17.5 billion (approximately $30 million) in a securitization by NSIA Banque Côte d’Ivoire. The landmark transaction is the first securitization of loans originated by a commercial bank in the West African Monetary Union and the first with a scheduled maturity of 5-years.
NSIA Banque Côte d’Ivoire will use the funds to increase lending to local small and medium-sized enterprises. The securitization will also help the bank access local capital markets and diversify its long-term funding through a source matched to its underlying assets. The transaction was arranged by Africa Link Capital Structuration, an investment banking firm based in Abidjan, Côte d’Ivoire.
The XOF40 billion (approximately $67.5 million) asset-backed securities, of which up to XOF17.5 billion is allocated to IFC, will be issued by a Fonds Commun de Titrisation de Créances (FCTC), a newly created securitization special purpose vehicle, and will be listed on the regional securities exchange. The FCTC will be managed by Africa Link Capital Titrisation.
Léonce Yacé, Managing Director of NSIA Banque Côte d’Ivoire, said, “This securitization is important for us because it will strengthen our capacity to finance smaller businesses. We are very happy to see our partnership with IFC coming to fruition in such a landmark transaction.”
Aliou Maiga, IFC’s Regional Director for West and Central Africa, said, “Helping small and medium-sized businesses access finance is critical to economic growth and job creation. Innovative local currency funding models, such as the one we have announced today, play an important role in achieving that.”
IFC’s investment leverages the International Development Association’s (IDA) Private Sector Window local currency facility. Further support came from the Global SME Finance Facility, a blended-finance partnership among IFC, the UK Department for International Development, and the Netherlands Ministry of Foreign Affairs.
IFC estimates Côte d’Ivoire’s SME finance gap is over $2.3 billion, or 6.84 percent of GDP. The local currency transaction will help open a new channel for small businesses to access long-term finance, while paving the way for similar funding initiatives in the region by other financial institutions.
This local-currency issuance will support the development of local capital markets in the West African Monetary Union. Strong local capital markets help ensure the efficient channeling of funds to businesses and infrastructure projects.
The investment is part of the World Bank Group’s Joint Capital Markets Program, or J-CAP, which is designed to support sustainable development through the creation of well-functioning local capital markets. J-CAP is holding a conference in Abidjan on February 10-11, 2020.
About IFC
IFC—a sister organization of the World Bank and member of the World Bank Group—is the largest global development institution focused on the private sector in emerging markets. We work with more than 2,000 businesses worldwide, using our capital, expertise, and influence to create markets and opportunities where they are needed most. In fiscal year 2019, we delivered more than $19 billion in long-term financing for developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity. For more information, visit www.ifc.org.
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About the IDA Private Sector Window
As part of the record $75 billion IDA18 replenishment, the World Bank Group created the $2.5 billion IDA Private Sector Window to catalyze private sector investment in the poorest and most fragile countries. Recognizing the key role of the private sector in achieving IDA18 objectives and the Sustainable Development Goals, the window provides concessional funds for co-investment alongside IFC and Multilateral Investment Guarantee Agency (MIGA) private investments. Concessional funds help to mitigate risk and reduce barriers, which unlocks and crowds in private investment in emerging markets. For more information, visit: https://ida.worldbank.org/psw
About NSIA Banque Côte d’Ivoire
NSIA Banque Côte d'Ivoire, a subsidiary of the NSIA Group, is a public limited company with a capital of XOF23.17 billion and is one of the main banks in Côte d'Ivoire. It has more than 82 branches in Côte d'Ivoire, a fleet of more than 120 ATMs and a representative office in Paris dedicated to the diaspora. The bank aims to be the preferred partner of retail and SME clients. The bank was awarded the Prize of Excellence in 2018 from the State of Côte d'Ivoire as the best institution in the financial sector, in the category Economy and Finance.
