Burundian Bank BCB Seeks $20 Million Loan to Support SMEs

(Ecofin Agency) – The project, awaiting approval, aims to support the Bank’s lending operations to Burundian micro, small and medium-sized enterprises. The financial institution whose largest shareholder is the Bank of Africa is exposed to SMEs in commerce, services, hotels and public works.

Banque de Crédit de Bujumbura (BCB), the third largest bank in Burundi with total assets of $333 million as of June 30, approached the International Finance Corporation (IFC) with a view to obtaining a loan of $20 million $, including $10 million from the IFC’s own account and $10 million mobilized from partners.

In a project note published Tuesday, October 24, the member institution of the World Bank group specifies that this financing awaiting approval will be spread over a period of three years (maturity), with a grace period of one year. It will be accompanied by a trade finance facility of up to $5 million and will allow the BCB to increase its loans to Burundian micro, small and medium enterprises (MSMEs), as well as import-export companies.

The Burundian bank, whose largest shareholder is the Moroccan banking group Bank of Africa with 24.2% shares, will thus strengthen its lending activity to local SMEs. The bank’s SME portfolio includes exposure to trading, service and wood processing companies, as well as hotel and catering companies, and construction and public works companies.

Beyond financing, the Bujumbura Credit Bank could benefit from a consulting program which will allow it to implement its MSME strategy, particularly in terms of gender finance and its digital finance strategy. Operational since 1964, BCB has been a member of the Bank of Africa network since 2008.

In a November 2022 report, co-produced with the World Bank and entitled “Diagnosis of the private sector of Burundi”, the IFC recommends facilitating access to financing for SMEs, as well as the development of financial services, to strengthen the credit infrastructure in the country and accelerate the country’s economic growth.

Chamberlain Moko