IFC, Government of Japan boost funding for SMEs in Sao Tome and Principe
AA – IFC, a member of the World Bank Group, today announced its first long-term financial investment in Sao Tome and Principe, in the form of a risk sharing facility with Banco Internacional de Sao Tome e Principe (BISTP). The investment is supported by donor funds from the Government of Japan, helping to address a large financing gap in the island archipelago where two-thirds of the population lives on less than $1.50 a day.
Sao Tome and Principe is one of Africa’s smallest economies, and about half of all its businesses indicate that lack of access to finance is a barrier to business growth. The $3 million risk sharing facility with BISTP, including $300,000 from Japan, will help provide working capital and loans to small businesses, supporting their expansion and modernization, and driving job growth. IFC and BISTP will share an equal amount of the lending risk.
“Meeting the twin goals of ending extreme poverty and boosting shared prosperity, requires new partnerships like this with BISTP and venturing even into smaller economies – where the impact can be greater” said IFC Director for Sub-Saharan Africa, Vera Songwe. “We are grateful to Japan for their contribution and the signal this sends to investors about the potential of Sao Tome and Principe and the important role small businesses and banks can play in economic growth. “
Mr. Joao Cristovao, CEO of BISTP said “BISTP is partnering with IFC to create a low-cost line of credit to help SMEs invest in modernization, the purchase of new equipment and technology, and expand their activities to help improve their businesses.”
Mr. Acacio Bonfim, an Executive Director of the Board of BISTP added “ SMEs need to significantly improve product and service delivery to better serve national and international market and this line provides an opportunity to do so. Beneficiaries will also acquire business negotiation skills, making them more competitive in job creation, economic growth while improving the standard of living for the people of Sao Tome.”
“This project will help us provide crucial support to SMEs in Sao Tome and Principe and improve the lives of people in one of the world’s poorest countries,’’ said Masahiro Kan, World Bank Executive Director for Japan. “Together with IFC, we can promote access to finance and create much-needed jobs and growth.’’
BISTP is the largest bank in Sao Tome and Principe and was founded in 1993. Its main sponsor is the Portuguese bank Caixa Geral de Depositos, which has helped to modernize its systems and streamline its operations. BISTP offers universal banking services through a network of 12 branch, 14 ATMs and 52 Points of Sales through the islands.
The investment is the latest from IFC’s Global SME Finance Facility, which was set up in April 2012 in response to the G20’s call from action to bridge the trillion dollar finance gap faced by SMEs. The first-of-its kind facility mobilizes funding from donors, international finance institutions and the private sector, to help banks scale up SME lending.
The Global SME Finance Facility already has about 70 active investment and advisory projects, in 20 countries. It targets SMEs that don’t have access to finance, including women-owned SMEs, agriculture and climate-related businesses and SMEs in fragile states generating jobs and growth in places that need it the most, such as Sao Tome and Principe.
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