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// REGIONAL ROUND-UP // AFRICA | APAC | EUROPE | MIDDLE EAST | NORTH AMERICA AFRICA
GLOBAL DEVELOPMENT FINANCE COALITION COMMITS OVER US $ 5.5 BILLION FOR MSME FINANCING IN AFRICA
The coalition for a sustainable and inclusive recovery of the private sector – an international group of 20 development finance institutions that came together in 2020 – has announced commitments of over US $ 5.55 billion of financing to micro , small and medium enterprises ( MSMEs ) in Africa between mid-2020 and end of 2021 , beating their set target of US $ 4 billion over the period .
The coalition said it had exceeded its initial target by 40 %, while development finance institutions jointly committed over US $ 5.55 billion of financing of micro , small and medium enterprises in Africa over the period .
In response to the unprecedented global health and economic crisis caused by COVID-19 , the coalition recognised the critical role development finance institutions play in supporting the crisis response in vulnerable countries .
While micro , small and medium enterprises are the economic lifeblood of emerging and frontier economies , they are also more vulnerable to crises than larger enterprises . In developing countries , formal small and medium enterprises contribute more than one-third of gross domestic product and account for 52 % of formal employment .
Improved access to finance for micro , small and medium enterprises is critically important to boost growth and the prospects of the 450 million young Africans projected to join the labour market by 2050 . The COVID-19 crisis put the viability of micro , small and medium enterprises under acute pressure and efforts to expand inclusive financial solutions are crucial for a successful recovery .
To address this challenge , the coalition ’ s signatories committed to :
• Deepen cooperation among their institutions
• Docus on inclusive financial solutions for the private sector
• Support clients with technical assistance and advisory services when needed
Consequently , the 1,400 projects contracted demonstrate a strong focus on smaller and inclusive projects as well as on a broad spectrum of small and medium enterprises , from small enterprises / startups to mid-sized firms with strong growth potential . In addition , signatories mobilised € 23 million of technical assistance , including capacity building and advisory services to MSMEs .
“ MSMEs are vital to Sub-Saharan Africa ’ s economy , representing 90 % of trade and more than half the jobs in the region ,” said Lori Kerr , CEO , FinDev Canada . “ As these businesses disproportionately suffered the impacts of the health crisis , we joined efforts to provide capital and advisory services to support the economic recovery . Surpassing our initial goal further motivates us to collaborate with our partners to promote sustainable and inclusive economic growth in Sub-Saharan Africa .” �
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