Under the chairmanship of Mr. Abdoulaye BIO TCHANE, Minister of State in charge of Planning and Development of Benin, was held in Cotonou, this October 05, 2018 at the Golden Tulip Hotel, The launch conference of the Salon Africain de la Garantie of which FAGACE is a partner. More than 500 professionals divided between bankers, guarantors and experts are expected to attend this event scheduled for next February.
Will the Saga (Salon africain de la garantie), scheduled for February 21 and 22 in Cotonou, Benin, mark the beginning of a new saga for SME credit guarantee institutions in Africa? At yesterday’s launch conference for this ground-breaking event, held in a hotel in Benin’s economic capital, the various speakers all converged on this ambition: to bring together the various players in the guarantee ecosystem, to raise awareness of this mechanism that is vital to the emergence of SMEs and African economic champions, and at the same time develop the guarantee business, whose vast potential remains largely untapped.
One example of what experts call “information asymmetry” is Fagace (Fonds africain de garantie et de coopération économique), one of Africa’s pioneering guarantee institutions. Since it was set up in 1977 in Kigali, Rwanda, Fagace has mobilized over 1,500 billion CFA francs for the benefit of various economies, through bank loan guarantees and various other forms of intervention. And yet, Fagace remains little-known, both to certain prescribers and to the SMEs it is supposed to relieve by improving their access to bank financing. Its Managing Director, Minafou Coulibaly-Koné from Côte d’Ivoire, who has made communication around Fagace’s new dynamics one of her main battlehorses in winning over public opinion, reminded us of this yesterday in Cotonou.
“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”. Ms. Coulibaly-Koné emphasized to the audience of bankers, financial experts and Pme bosses present the increased usefulness of guarantees, at a time when, although 90% of the economic fabric of member countries is made up of Pmes, only 20% of them have access to bank financing. “In view of 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.
Guarantees are an opportunity for small businesses to gain easier access to bank financing in an environment marked by the reluctance of banks, compounded by the high prudential ratios introduced by the new Basel 2 and 3 standards. But it also represents a greater opportunity for banks, which can increase their customer segments and, by extension, their profitability and capital adequacy ratios, by financing more risk-mitigated SMEs through guarantee institutions,” emphasized Géraldine Mermoux of the specialist financial firm Finactu.
These various advantages of guarantees, as well as the mechanisms for guarantor intervention, will be at the heart of the Salon Africain de la Garantie (Saga) to be held on February 21 and 22, 2019 in Cotonou, stressed Ms. Naka Gnassingbé De Souza), president of the Association Professionnelle des Institutions de Garantie (Apiga). The show itself will consist of high-level panels, B to B meetings and exhibition stands are planned to enable the various players in the guarantee ecosystem to present their offers and services.
Opening the launch conference, Benin’s Minister of State for Planning and Development, Abdoulaye Bio Tchane, recalled that it was to change the situation of under-utilization of the all-important instrument of guaranteeing bank loans to SMEs that the Saga initiative was taken. Reiterating the support of the Beninese government, also represented by Minister Modeste Kérékou for SMEs and the promotion of the private sector, Mr. Bio Tchané called on guarantors, SMEs and bankers to invest massively in Saga.
Member countries: Bénin
