The International Finance Corporation (IFC) today announced a partnership with Orange Bank Africa (OBA), the digital bank of the Orange Group, to help thousands of businesses, including those in rural and underserved areas, access loans and microloans online. This will allow even the smallest businesses in West Africa to access the financing they need to grow.
In this ground-breaking collaboration, IFC will offer a risk-sharing facility to assist OBA in expanding its digital lending operations to micro, small, and medium-sized businesses (MSMEs) in Côte d’Ivoire, Senegal, and other regions of West Africa once OBA has obtained a licence to do business there.
The facility will guarantee 50 percent of a portfolio of eligible short-term loans of up to the local currency equivalent of $30 million originated by OBA to MSMEs, enabling OBA to provide an estimated additional 300,000 loans by 2025.
The risk-sharing facility is IFC‘s first designed specifically for digital loans globally. This type of loan greatly expands financial inclusion because borrowers can apply from anywhere, avoiding the need to visit a bank branch or provide lengthy documentation.
“Partnering with IFC allows us to increase resource mobilization for sub-regional development. By pooling our expertise to accelerate the financing of micro, small, and medium-sized businesses through concrete solutions, we contribute to improving their productivity, increasing their competitiveness on local and international markets, and creating jobs,” said Jean-Louis Menann-Kouamé, CEO of Orange Bank Africa.
“This innovative investment demonstrates our strong commitment to leveraging the power of digital financial services, especially in regions where financial inclusion remains limited, and has the potential to set a precedent in digital lending,” said Olivier Buyoya, IFC Regional Director for West Africa. “Partnering with OBA, a unique bank in French-speaking West Africa, also aligns with IFC’s strategy to promote inclusive finance and contribute to the deployment of digital infrastructure and digital economy solutions in the region.”
The IFC and OBA cooperation expands on an advisory programme that was established in 2022 to assist OBA in creating a product offering and strategy for MSMEs, including mobile money agents and retailers in Côte d’Ivoire. IFC will keep giving consulting services to OBA in order to strengthen its risk management policies, expand its selection of digital products, and enhance the customer experience.
Although financial inclusion in West Africa has recently improved, MSMEs in the region still see financing as a significant barrier to growth. According to the MSME finance gap study from the World Bank Group, 57 percent of MSMEs in Côte d’Ivoire and 63 percent of MSMEs in Senegal report having trouble getting a loan or line of credit.
IFC’s support will help OBA reach underserved segments such as women-owned businesses, young entrepreneurs in rural areas, and entrepreneurs in creative industries. The risk-sharing facility will also enable OBA to increase its lending to mobile money agents and to merchants who accept digital payments, supporting the growth of these small businesses and the development of the sector.
IFC’s investment is backed by the International Development Association’s Private Sector Window Blended Finance Facility, which provides first-loss guarantees in low-income countries.
