The Trade Hub Learning Event showcases insights from financial institutions and advisors on blended finance mechanisms
By Nana Akua Mensah, Communications Specialist
In West Africa, where socio-political conditions and heavy reliance on agriculture and extractive industries make private-sector financing difficult to attract, governments and donors must invent innovative approaches to secure the investments needed for social impact projects. One such approach is blended finance, which uses catalytic capital from public or philanthropic sources to de-risk private sector investment in sustainable development. This is the primary tool of the USAID West Africa Trade & Investment Hub (Trade Hub).
On June 20th, the Trade Hub held a virtual Learning Event, “Blended Finance: Capitalizing on Lessons Learned,” featuring ten Financial Institutions & Advisors (FIAs) co-investment partners. The event provided an interactive opportunity for government agencies and fund investors to gain insights into the Trade Hub’s blended finance model with banks and non-bank financial institutions, impact funds, and advisors.
The Learning Event attracted more than 50 participants from across West Africa, East Africa, Europe, and the United States. It focused on the Trade Hub’s structured grant products, such as investible first loss and cash collateral, which launched four new investment funds, unlocked SME lending through commercial banks, and raised capital through advisory services. Over its lifetime, the Trade Hub committed $17.3 million to twelve diverse FIAs to catalyze private sector investments in Small and Midsize Enterprises (SMEs) and Monetary Financial Institutions (MFIs). By March 2024, 10 FIAs had impacted over 60 SMEs, startups, and Micro Finance Institutions involved in food security, access to finance, climate adaptation, inclusive job creation, value-added manufacturing, exports, and health.
The event was moderated by Charles Polet, Deputy Director of Public-Private Partnerships for the Trade Hub. It featured three panels with presentations and Q&A sessions.
Opening the event with Welcome Notes was Kevin McGlothlin, Director of the Office of Regional Economic Growth at USAID/West Africa who remarked: “It is exciting to see how USAID’s finance partners—financial institutions and advisory firms—rose to the challenge and made more than $17 million available to small businesses in a very difficult time. Together we’ve been able to unlock the true potential of these businesses.”
The panelists spoke on their experiences against regulations sponsor risks market challenges; viability of cash collateral grants unlocking bank lending for SMEs startups unprecedented market challenges; difficulties associated data collection SMEs bank non-bank financial institution compliance requirements co-investment partnership.
Closing the event Kafui Djonou Trade Team Lead USAID/West Africa emphasized USAID’s appreciation Trade Hub’s co-investment partners commitment improving financing private sector West Africa.
Watch webinar recording continue discussion any social media platforms: FIA Learning Event
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