Microfinance in Africa: BNP Paribas mobilizes its network to optimize its impact
In Africa, BNP Paribas helps excluded groups finance their activities by expanding their access to loans. To ensure it has the best impact, the Group relies on its subsidiaries and the strong partnerships it has built with leading Microfinance Institutions (MFIs).
More than seven million microloan beneficiaries in AfricaAll over the world, BNP Paribas plays an active role in promoting microfinance to expand microloans, encourage local entrepreneurship and assist the most marginalized populations.
In Africa, where the Group employs 8,692 people, Microfinance Institutions have seen constant growth in their portfolios: +16.4% in 2015 compared with 2014, according to the 2016 Convergences Microfinance Barometer. Africa and the Middle East represent 7.4 million beneficiaries for a loan total of 9.4 billion dollars.
To optimize its impact in Africa, BNP Paribas decided to harness the power of its subsidiaries: BMCI in Morocco, UBCI in Tunisia, BICIS in Senegal and BICICI in Ivory Coast, as well as BNP Paribas CIB in South Africa. This strategy notably enables the bank to finance projects using local currency. The Group’s microfinance experts chose which MFIs would receive support in each territory. The experts based their choices on the quality of operations, transparency and social performance of the institutions. Efficiency is further improved by long-term partnerships and regular assignments in the field.
A winning approachIn Tunisia, UBCI has supported TAYSIR since the MFI’s creation in 2014. To facilitate the new institution’s launch and expansion, BNP Paribas purchased a stake in its capital, while also joining the MFI’s head office and Board of Directors. In this way, the Group plays an active role in crafting its strategy and continuously improving its offer for micro-entrepreneurs.
In Morocco, BMCI has supported AL AMANA for more than 12 years. The institution has become the biggest MFI in the Kingdom, with total loan issuance of 220 million euros and nearly 330,000 customers. It is also distinguished by its line of quality services, which it continues to expand with new products that promote the success of micro-entrepreneurs.
Two main loan types: group loans and individual loans
- Group loans: a borrower group is formed and receives the microloan. This loan type generally concerns the poorest borrowers. No financial guarantee is required, because group members take on the loan responsibility together.
- Individual loans: these loans are granted to a single person, and generally require a financial guarantee or credit check. This is the fastest growing loan type in Africa.
BNP Paribas and microfinance: 30 years of history!
For nearly 30 years, BNP Paribas has actively supported microfinance. The Group has taken action to ensure that marginalized populations can access financing and start their own economic activity. This social and solidarity commitment is an integral part of the Group’s strategy when it comes to CSR (Corporate Social Responsibility).
248 million euros in funding and investment to support Microfinance worldwide
The Bank decided to act directly in the field and meet actual local needs by partnering with microfinance institutions (MFIs). The Group lends its support to this sector in 17 countries worldwide, while expanding its efforts every year. In late 2016, funding from BNP Paribas indirectly enabled 309,000 people to start their activity and improve their standard of living. The goal is ambitious: indirectly supporting 350,000 micro-entrepreneurs by the end of 2018. In addition to financing its own balance sheet, BNP Paribas developed solidarity funds to give its customers and employees from major companies a chance to boost the social value of their savings. These funds include 5-10% of investments in microfinance institutions and other Social Enterprises.
MFIs (Microfinance institutions), which primarily fund microcredit through loans, need partners...