EBRD launches in Senegal with €15mn trade facility and SME support

The European Bank for Reconstruction and Development (EBRD) has made its first investment in Senegal, providing a trade finance facility of up to €15mn to Ecobank Senegal as well as support for SMEs.

The European lender said the trade finance facility, delivered under its Trade Facilitation Programme, aims to boost the country’s imports and exports, bolster international banking links and improve access to trade finance for MSMEs.  

The funds will be used to issue guarantees to “confirming banks to mitigate political and commercial payment risks”.

Ecobank Senegal, part of pan-African banking group Ecobank Transnational, will gain access to the EBRD’s network of partner banks.

Odile Renaud-Basso, EBRD president, said: “I am delighted to sign our first trade finance limit in the country with Ecobank Senegal, which we hope will be the start of a long-lasting partnership.  

“This facility will help local businesses access essential goods, strengthen private sector growth and contribute to the country’s economic resilience.”

Sahid Yallou, Ecobank Senegal’s managing director, added: “This trade finance facility reinforces our unwavering commitment to supporting Senegalese businesses, particularly micro, small, and medium-sized enterprises, which are true engines of our economy.”

The lender’s Trade Facilitation Programme includes 28 economies, more than 130 issuing banks and over 800 partner banks worldwide.  

Earlier this month, the EBRD also unveiled its support for Senegalese SMEs through a package of “tailor-made financing, advisory support and policy engagement” focused on strengthening the private sector, following the lender’s opening of a resident office in Dakar.

Financing options will include credit lines provided via partner financial institutions, portfolio risk-sharing facilities for micro and small businesses, individual risk-sharing arrangements for medium-sized firms, and supply chain finance solutions.

The country became an EBRD shareholder and country of operation last year.  

Senegal plays a key role in regional trade due to its “position as a gateway to West Africa” and its membership of the West African Economic and Monetary Union, the multilateral development bank said.

In January, the EBRD announced its first investment in Sub-Saharan Africa, which included providing a US$100mn trade finance facility to Nigeria’s Access Bank.