Small and medium sized enterprises (SMEs) in DRC are generally unable to access finance from banks for a variety of reasons. Based on ELAN’s diagnostic work, the main constrains include:
- The lack of financial products tailored to the needs of SMEs;
- The Financial institutions’ perception of risk for certain activities (e.g. agriculture, river transport) carried out by SMEs;
- The rigidity of credit disbursement processes and practices at financial institutions;
- The difficulty for SMEs to submit credit application files with certified financial statements to financial institutions;
- The inability of SMEs to provide high-quality collateral as required by financial institutions;
- The lack of trust between SMEs and financial institutions; and
- The SME owners’ limited skills in certain management areas.
To address these constraints in a systemic and sustainable way, ELAN RDC intervenes on both the supply and demand sides of the market, focusing its work on three pillars:
- Development and implementation of innovative products with financial institutions, including:
- Collateral Management Agreement CMA (agricultural sector)
- Traditional and inclusive insurance;
- Facilitation of linkages between key market players and promotion of synergies conducive to the financial inclusion of SMEs; and
- Support to SMEs in the form of Business Development Services (BDS) and training to adopt better management tools and practices.