[Burundi] TDB group unlocks funding for women-led small and medium enterprises via its SME program
As part of its SME Programme, the Trade and Development Fund (TDF) of the Eastern and Southern African Trade and Development Bank (TDB) Group, has issued a 3-year BIF 500 million partial risk guarantee facility in favor of the Women’s Initiative for Self-Empowerment S.A. (WISE) in Burundi. WISE will the use the guarantee to borrow BIF 1 billion (≈ USD 510,000) in working capital from Banque de Gestion et de Financement (BGF).
The funding unlocked will be on-lent by WISE in the form of small and medium enterprise loans, particularly in agribusiness and trade. Furthermore, the facility will enable WISE to (i) roll out new women loan products including the ‘3-women product’, a loan which was designed for women solidarity guarantee groups, and (ii) improve its loan processing times through an investment in technology that will enable the institution to reach more Burundians outside of Bujumbura.
By boosting WISE’s capacity to borrow, TDF is enabling it to expand its pool of working capital to grow its lending operations and prepare it to grow further into an even bigger financial institution.
TDF’s guarantee will be blended with a non-repayable technical assistance grant of USD 30,000 targeted at strengthening WISE’s corporate governance and supporting staff training on modern SME lending processes which align with the institution’s new digital finance strategy. The impact of this intervention will be enhanced financial inclusion.
According to a survey of the Bank of the Republic of Burundi, about 22% of the country’s adult population have a bank account, and only 30% of which are women. For clients who are members of associations, it is about the same percentage for women as it is for men. That said, for microenterprises, it is very difficult to obtain credit from formal commercial banks and even from many microfinance institutions, due to lack of collateral.
WISE is one of Burundi’s leading microfinance institutions. It was established in 2007 by the members of the the Association of Women in Business in Burundi (AFAB) to (i) facilitate savings among women, (ii) provide loans to members and entrepreneurs engaged in micro and small-scale income generating activities, (iii) provide guarantees that enable members to borrow from local banks, and (iv) offer non-financial services such as financial education. WISE’s main objective is the attainment of economic and financial autonomy of more vulnerable social groups – especially women – to overcome the problem of collateral. WISE currently has 366 members.
BGF is a Burundian commercial bank that offers a range of financial services mainly through its network of 15 branches and counters across the country’s 9 provinces, in rural and urban areas. The vision of the bank is to stimulate development by adapting banking practices which can allow for sustained grown in Burundi.
Admassu Tadesse, TDB Group Managing Director and President Emeritus said that “TDB Group’s relation with WISE started about a decade ago, when we extended a first USD 400,000 guarantee to WISE to support women microentrepreneurs in Burundi. We are therefore pleased to expand our partnership and further support Burundi’s women entrepreneurs”.
“As we continue to innovate in the area of financial inclusion, we are happy to be rekindling our relationship with WISE – a leading microfinance institution in Burundi” adds Gloria Mamba, TDF Director General. “Without microfinance institutions like WISE, women-led SMEs in Burundi would remain mostly unbanked. By increasing access to capital for WISE and enhancing its corporate governance and digital finance strategy we know the impact will be felt where it is needed the most. We hope that the learnings from the experience with WISE will help us inform other activities across our region to mainstream women in the economy.”
Nadine Mutabaruka, WISE CEO, confirmed that: “WISE S.A.’s partnership with the TDB Group dates back to 2010. The TDB Group has renewed its confidence in WISE by extending a new partial guarantee allowing it to access financing from Banque de Gestion de Développement (BGF) equivalent to double the size of this guarantee. This renewed trust will enable WISE to fulfil its main mission to finance women entrepreneurs and SME projects. Women growth and economic emancipation will not longer be a dream, but rather, will become a reality.”
Jocelyne Munezero, Head of Business and Development at BGF Bank said “Banque de Gestion et de Financement (BGF) has been maintaining good relations with WISE for many years. With the aspiration to continue being close to its clients, and in the framework of its engagement to contribute to financial inclusion on a greater scale, the Bank believes that partnerships with microfinance institutions constitute a channel to reach micro and small enterprises. Supporting these efforts and women-led economic and commercial enterprises in Burundi remains the best way to impact development in the country. It is therefore with pride that the Bank remains engaged to support WISE via financing, like the one the Bank provided to WISE, with the coverage provided by TDB’s guarantee”.