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Financing Small And Medium Enterprises in Africa

13 January 2005

Enterprise
The Working Party will focus on developing workable, flexible and sustainable financing mechanisms based on the wide range of facilities already available.
The Working Party on Small and Medium Enterprises (SMEs) Financing in Africa is meeting in Tunis, Tunisia, on 12-13 January 2005.

"One of the greatest challenges facing banks, especially in Sub-Saharan Africa, is for them to develop additional organisational capacity at the branch level to deal with SMEs," said Professor Andreas Antoniou, Deputy Director of the Economic Affairs Division of the Commonwealth Secretariat. "The meeting will explore various options for developing and financing a technical assistance fund to assist banks in building organisational capacity."

The Working Party will focus on developing workable, flexible and sustainable financing mechanisms based on the wide range of facilities already available. A key goal is to mitigate the risks associated with SME financing while minimising possible market distortions and enabling such facilities to remain commercially viable.

The meeting is organised by the Commonwealth Secretariat in collaboration with the African Development Bank and the NEPAD (New Partnership for Africa's Development) Secretariat. Delegates at the meeting also include representatives of the European Union's Centre for the Development of Enterprise/ProInvest, the International Labour Organisation, the European Investment Bank and Commonwealth Business Council/Strategic Partnerships for Business Growth in Africa.

Discussions will examine the role that domestic commercial banks could play, and the issue of franchising in Sub-Saharan Africa, as this is believed to offer a useful way forward. The meeting will also look at ways in which private banks could access the savings of the African diaspora to support SME development in Africa, and in particular how remittances could be channelled towards this goal. In addition, the Working Party will explore the role that private development banks could play in bridging the financing gap for SMEs in Sub-Saharan Africa and consider alternative models of operation.

The Tunis meeting builds upon last year's meeting in South Africa which took forward the mandate provided by the 2004 Commonwealth Finance Ministers Meeting (CFMM) to develop synergies and partnerships on financing schemes, and will consider other recommendations of the 2004 CFMM.

 

CNIS - the Commonwealth News and Information Service Issue 217  12 January 2005

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