ÉLan’s work in this sector ended in JULY 2021.

CONTEXT

Small and medium-sized enterprises (SMEs) in DRC are generally unable to access finance from banks for a variety of reasons. Based on Élan RDC’s diagnostic work, the main constraints included:

  • 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.

Strategy

To address these constraints in a systemic and sustainable way, Élan RDC intervened on both the supply and demand sides of the market, focusing its work on three pillars:

A. Development and implementation of innovative products with financial institutions, including:

  • Collateral Management Agreement CMA (agricultural sector) ;

  • Leasing ;

  • Traditional and inclusive insurance.

B. Facilitation of linkages between key market players and promotion of synergies conducive to the financial inclusion of SMEs; and

C. Support to SMEs in the form of Business Development Services (BDS) and training to adopt better management tools and practices.

SEE ALSO

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BRANCHLESS BANKING