The situation of small and medium enterprises in Africa, which is very important for the economies of countries on the continent, is worrying. Their financing needs are $ 331 billion. Needs that constitute a real obstacle to their development and therefore to the economic development of the Continent State.
"In Africa, there are 44 million formal SMEs which account for 33% of continental Gross Domestic Product and 45% of employment. But 70% of them do not have long-term funding and 80% do not have access to bank credit", Said Thameur Hemdane, co-chair of Participatory Financing Africa and the Mediterranean (FPAM) speaking at Forum du crowdfunding in Africa in the Senegalese capital, Dakar, this week. "Their financing needs are $ 331 billion. The financing gap is the first barrier to the development of African SMEsHe added.
Hemdane's attention was shared by Laurent Gonnet, head of the financial sector specialist at the World Bank (WB) who, citing the Strategic Market Initiative (Forum SMI), suggested that in West Africa there would be a $ 10 billion deficit to finance formal SMEs. "For Senegal, that's one billion dollars. Therefore, the World Bank and other partners must place all conditions for this gap to be completed between 5 and 10 yearsContinuing World Bank experts.
crowdfunding, a credible alternative, but not enough
To overcome this gap, some actors turn to crowdfunding (crowdfunding) But the African Development Bank (AfDB) found that while this meant reliable, that was not enough. "In 2017, the total number of crowdfunding in Africa was $ 153 million. This system is not completely safeSaid Valérie Dabady, head of the Mobilization and External Financing Resources Department at AfDB.
Laurent Gonnet proposed a solution based on three levers. "The first is competition in the financial sector because if it does not exist, stakeholders will not go to SMEs. The second lever is a credit infrastructure that destroys information symmetry between bankers and their clients. The third is the need for public intervention with the central bank, the Ministry of Finance or other public forcesInvestors explained. For Gonnet, "often bankers ask for buildings, houses, land as collateral without no financing. This does not help young companies; funding will eventually be given to those who already have wealth"Laurent Gonnet calls on decision makers to develop"imperative»«expanded collateral regime where other types of collateral will be offered to bankers"
You have to do «bank saliva by making them understand that SME financing can make moneyAdd Gonnet. Too,Ministry of Finance [doivent] placing guarantees of funds that offer additional levels of comfort to banks that allow them to finance SMEs a little more", Argues Gonnet, senior specialist in the financial sector at the World Bank.