Through an agreement signed September 8 with Trade Hub, the regional Coris Bank group—with subsidiaries in Burkina Faso, Cote d’Ivoire, Mali, Togo, and soon Benin and Senegal—will award up to $17 million in loans for business expansion of small and medium processors and exporters working in cereals, cashew, shea, and other value chains. The Trade Hub in turn will provide technical assistance to the bank in four countries to build the bank’s knowledge of agro-processing and light manufacturing in West Africa.
The Trade Hub launched a process in 2015 to broaden its network of financial institutions, finding that most banks in West Africa are risk-averse with limited or no interest in agribusiness and start-ups.
“Financial institutions’ lack of knowledge about the agribusiness sector, coupled with their general risk-averse position, makes lending to the agricultural sector a continuous challenge,” said Jean-Francois Guay, Trade Hub’s Finance and Investment team lead.
As part of its technical assistance package, the project hired a senior consultant, Gerard Mariotte, who will collaboratively develop training materials, particularly for credit risk analyses of the targeted agriculture sectors. From October 2016 through January 2017, the Hub will also coach and monitor Coris Bank’s network of loan officers and management in four countries—Burkina Faso, Cote d’Ivoire, Mali and Senegal—on new loan requests in Trade Hub value chains.
This agreement is a precursor to an agreement to be signed later this year between Coris Bank and USAID’s Development Credit Authority (DCA), which helps to bridge collateral gaps with a 50% guarantee to financial institutions.