Mr. Minister of State for Planning and Development of Benin,
Mr Minister of Small and Medium-sized Enterprises and Promotion of the Private Sector,
Mr. Representative of the Minister of Economy and Finance,
Mr. Representative of the National Director of BCEAO in Benin,
Mr. Representative of the President of the West African Development Bank,
Mr. Representative of the President of the Banque de Développement des Etats de l’Afrique Centrale,
Madam President of the Association Professionnelle des Institutions de Garantie (Professional Association of Guarantee Institutions)
Mr. President of the Association Professionnelle des Banques du Benin,
Representatives of regional and international institutions,
Ladies and Gentlemen, General Managers of banking and financial establishments,
Ladies and Gentlemen, General Managers of Guarantee Institutions,
Representatives of the Benin Chamber of Commerce and Employers,
Ladies and Gentlemen, Economic Operators,
Distinguished guests, in your capacity as such,
Ladies and Gentlemen,
Good morning, and thank you for honouring with your presence this conference to launch the Salon Africain de la Garantie.
Following in the footsteps of the President of APIGA, Madame Naka De Souza, I’d like to sacrifice tradition by wishing you all a very warm welcome to Cotonou.
Before continuing, I would like to thank you, Mr. Minister of State for Planning and Development of Benin, for the great honor you have done us by presiding over this ceremony to launch the Salon Africain de la Garantie.
I would also like to welcome the distinguished presence of the Minister of Small and Medium-sized Enterprises and Private Sector Promotion, who has honored us with his participation in this conference. This testifies, if proof were needed, to the Beninese government’s interest in African financial institutions and their contribution to more inclusive growth in our countries through SMEs.
On behalf of us all, and on my own behalf, I would like to ask you to convey to the Head of State, His Excellency Patrice TALON, and to his Government, our deep gratitude for this mark of support.
To all the eminent personalities here present, your presence today is more than an act of courtesy, it is a commitment, and augurs well for the quality of our debates and the orientations that may result from them.
Dear Ministers,
Ladies and Gentlemen,
Dear guests,
This conference to launch the Salon Africain de la Garantie (African Guarantee Fair), whose theme is “The stakes of a platform between guarantors, banks and SMEs”, is of undeniable interest.
In fact, it responds to the need for the players involved to foster the synergies essential to improving their efficiency for the benefit of our countries’ economies.
As you know, the Fonds Africain de Garantie et de Coopération Economique (FAGACE) is one of the forerunners in the field of guarantees in Africa. For over 40 years it has contributed to the economic and social development of its member states, and since 2017 has been stepping up its interventions on behalf of SMEs.
Opportunely, the dynamism of the guarantee market has strengthened with the arrival of new entrants and the creation of our Association, APIGA.
But APIGA cannot be an island. For it is neither possible nor desirable to go it alone in a world like ours, marked by so many interdependencies and connectivities that it is essential to pool energies and resources.
Much remains to be done to ensure not only our growth but also, and above all, our transformation in order to consolidate our gains and reduce our vulnerability to the ever-increasing needs of our economies.
In my opinion, one of the fundamental actions to be undertaken is concertation. A platform for periodic exchanges to better adapt our businesses to an ever-changing environment.
In this respect, we need to enlist the support of all African financial institutions, as well as private sector organizations and associations, to find appropriate solutions that will strengthen our ability to cope with market developments and external or unexpected events.
Dear Ministers,
Ladies and Gentlemen,
Dear guests,
As you know, the African financial market is in a state of flux. We need to rethink and reorganize our development financing model.
Recently, to take the case of the UEMOA zone, we have seen the implementation of the new BALE 2 and BALE 3 prudential measures, with a consequent impact on our approaches.
What does this mean in practice?
Indeed, the implementation of Basel standards presents banks with new constraints when it comes to project financing. From now on, each security taken to cover a loan must be weighted. In this context, cover provided by multilateral guarantee funds such as FAGACE and FSA is weighted at 0%, or in the worst case at 20%, according to some bankers.
However, cover provided by approved national and private guarantee funds is weighted according to the weighting granted by the banking commission of the zone concerned.
From now on, banks must systematically ensure that they have all the necessary guarantees before granting loans. This provision risks slowing down access to financing for SMEs and, by the same token, the resumption of growth in our economies.
Moreover, it is no secret to say that our banking partners are currently experiencing real difficulties, and the figures concerning the level of deterioration and provisioning rates call for urgent solutions.
Indeed, (according to the annual report of the Banking Commission) the gross deterioration rate of WAEMU banks over the last few years varies between 15.1% and 13.5%, with provisioning levels of over 60%.
As for portfolio quality, although it improved slightly in 2016, its level is still worrying. Gross outstanding past-due loans of WAEMU credit institutions rose by 194 billion to 2,392 billion in 2016.
In the specific case of Benin, the rate of deterioration stood at 21% for the same period, with provisioning rates rising steadily.
All this goes to explain why banks are only willing to commit to non-risky projects with substantial collateral, or with minimal risk. Conditions that are difficult to meet for the vast majority of African SMEs.
Dear Ministers,
Ladies and Gentlemen,
Distinguished guests,
In view of the above, what will define our ability to move forward will be our willingness to pool our strategies in the service of the common good.
This is why we, the Guarantors, need to play a more active role in this ecosystem, to support banks in financing projects that create wealth and development for our economies.
However, despite the presence of at least twenty guarantors on the African market, it has to be acknowledged that guarantee institutions are still little or poorly known by beneficiaries and even by some banks.
Some financial institutions also have a negative perception of guarantee funds, following unsuccessful experiments.
Given my 20 years’ experience in banking, I can safely say that guarantee funds are a way of strengthening the resilience of the banking sector and accelerating access by SMEs to the financing they need for development.
Dear Ministers,
Ladies and Gentlemen
Distinguished guests,
This is where the creation of an African Guarantee Fair comes into its own.
I welcome this initiative. That’s why I join the President of APIGA and the Managing Director of the FSA, who has expressed his interest, in supporting this particularly welcome project, and I invite you all to join in.
I am convinced that, by pooling our efforts, this platform will enable us to deepen the internal market of our economies, for greater growth and prosperity for our countries.
The various communications that will follow will, I’m sure, enable us to harmonize our points of view and agree on the approach to adopt.
It is with these hopeful words that I would like to conclude by wishing this conference every success.
Thank you all very much.
