1. MENA SME Guarantee Facility By Laetitia Habchi
EU WORKSHOP: NEW MODELS OF PRIVATE SECTOR PARTICIPATION IN DEVELOPMENT FINANCE
MENA SME Guarantee Facility By Laetitia Habchi
2 February 2017

2. Our case today : MENA SME Guarantee Facility
INTRODUCTION:
Our case today : MENA SME Guarantee Facility
About AFD: AFD is a financial institution and the main implementing agency for France’s official development assistance to developing countries and overseas territories.
Our challenges: How to meet the needs of SMEs market? How to efficiently support access to finance ? How to share the risk? How to maximize the impact?
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3. EU/NIF Grants (EUR million)
BACKGROUND:
G8 Deauville 2011 : EU partners commitment to support Arab Spring transition with EU initiative For financial Inclusion
Financial Inclusion facilities with NIF support :
Lead
IFI
EU/NIF Grants (EUR million)
- Support to microfinance institutions (SANAD)
KfW 30
- Support to Risk Capital Operations (equity, venture capital), microfinance)
EIB 50
- Small Business Advisory services (SBS)
EBRD 20
- Support to MSME Financial Inclusion 26
- MENA SME Guarantee Fund (MENA Facility)
AFD 24
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4. EU partnering strategyfor blending …
BACKGROUND:
EU partnering strategyfor blending …
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5. CONTEXT:
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6. MARKET CONTEXT
The trend is a value proposition that responds to multiple needs with integrated solutions/products
Illustration
Nokia
Sony
Kodak
IPhone Apple
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7. CHALLENGE:
How to mix International Financing institutions (IFI) products with private sector financing to meet SMEs needs?
Solution:
Blending instruments
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8. Towards a new value proposition….
Traditional IFIs – EU offering …
coverage
Hedging
Credit Line
AFD
Recruitment
Enrolment
…à un système intégré
Enrolment
Enrolment
….New IFIs–EU offering with Blending finance
Marketing
Equity
Welfare
Welfare
Welfare
Credit Line
AFD
Credit Line
IFC
Technical
assistance
Credit Line
Proparco HR
Hedging coverage
Technical assistance
Credit Line
IFC
Progression
Progression
Progression
Risk
sharing
First loss coverage
Learning
Learning
Learning
Finance
Finance
Finance
Delivery
Delivery
Delivery
First loss coverage
Risk
sharing
Credit Line
Proparco
Equity
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9. MENA SMEs : Structure of the New Facility
EC contribution: 24 M€
Existing Framework Agreement IFC/AFD
Case by case basis IFC/Proparco
Unfunded instruments
Funded instruments
Risk Sharing Facilities / Performance incentives / Technical Assistance
Counter-guarantees / First loss /
Technical Assistance
Credit lines to public and private financial institutions / Performance Incentives / Hedging cost mitigation
LGFs
Guarantees
PFIs / NBFI
PFIs / NBFI
PFIs / NBFI
Loans
Loans
Loans
SMEs, VSEs, WoBs
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10. MENA SMEs : Impact 628 X 26 24 Total Financing NIF 02.02.17
BLENDED
NON BLENDED
Total (Euro M)
Type / Sources
EU facilities
International Financial Institutions (IFI) : AFD, Proparco, IFC
Financial Institutions (PFIs, NBFIs LGFs)
Beneficiaires & Owners (SME)
1 - RSFs
First Loss 6 40 16
102,5
Performance Incentive
0,5
2 - LGFs
5,1 34
102 27
168,1
3 - Credit Line
5,5
260 54
323,5
Partial hedging cost cover 3 1
4 - Technical Assistance
PFIs & NBFIs 31
33,4
LGFs
1,4
5 - Other cost
Communication
0,3
Evaluation, audit
0,2
Total Uses (€M) 24
365
196 43
628
Leverage
15,21
8,17
1,79
26,17
389
239
628
X 26
NIF 24
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11. Key Success Factors to achieve goals…
Coordination between stakeholders
Adaptation
Flexibility
Control of Development & Execution cost
Market knowledge
EU support
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12. THANK YOU
afd.fr