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News 2 mins Read 8 Jun 2023 Brussels

EDFI Management Company Launches MSME Platform to Address Financing Constraints in Underserved Regions

Brussels, 8 June 2023 – EDFI Management Company (EDFI MC) announces today the launch of the EDFI MSME Platform under the EFSD+ (European Fund for Sustainable Development Plus). This platform aims to alleviate financial constraints faced by micro, small, and medium-sized enterprises (MSMEs) and local financial institutions (LFIs) in Sub-Saharan Africa (SSA) and the EU Neighbourhood (NEAR).

MSMEs and LFIs in SSA and NEAR countries often face funding challenges, limited access to capital in rural areas, and obstacles such as information asymmetry and lack of collateral. As a result, MSMEs struggle to obtain affordable financing, while LFIs focus on larger clients with extensive collateral requirements. The MSME Platform will address these issues by reducing risk through the EFSD+ guarantee.

The program targets underserved countries, including least developed countries (LDCs) and fragile states, as well as underserved segments in countries where European DFIs have experience. By expanding financial sector support in fragile states/LDCs and indirectly assisting MSMEs through LFIs, the MSME Platform aims to create economic opportunities, decent jobs, and skills for individuals in SSA and NEAR countries, with a focus on youth, women, and migrants.

“We are pleased to see the launch of the EDFI MSME Platform under the EFSD+ initiative. This platform will play a crucial role in addressing financial constraints and promoting sustainable economic growth in Sub-Saharan Africa and the EU Neighbourhood. By supporting micro, small, and medium-sized enterprises, as well as local financial institutions, we aim to create a conducive environment for entrepreneurship and job creation. The European Union is committed to working hand in hand with EDFI MC and European DFIs to achieve our shared goals of inclusive and resilient economic development.” said Kay Parplies, Head of Unit – External Action Guarantees, European Commission – DG International Partnerships.

“We are proud to contribute to creating the ideal conditions for effective participation of the private sector in the implementation of the EU’s Global Gateway strategy.“ commented Rodrigo Madrazo, CEO of EDFI Management Company.

About EDFI Management Company:

The EDFI Management Company (EDFI MC) was established in 2016 on behalf of 15 European Development Finance Institutions (DFIs). Since 2021, EDFI MC is owned by nine EU pillar assessed DFIs and the EDFI Association in equal shares.

EDFI MC delivers innovative development finance solutions that enable European DFIs, development banks and private sector investors to increase the scale and impact of their work. The company focuses on business models, technologies and geographies where other investors have not been able to operate at the desired scale given their resources and investment criteria.