BOA-DRC

Print

In 2007, the Group Bank of Africa (“BOA”) took the decision to extend its network to DRC. Considering the reputation of the country and the risks attached to a potential investment there, that decision was a real challenge for the Group. For that reason, the latter looked for the support of strong and reliable partners with a certain knowledge of the region and able to bring value added to the investment. Proparco and BIO were approached to become founding investors and, in March 2010, the bank officially started its activities with BIO and Proparco as backing shareholders with a 20% stake each. In 2009, BIO committed a USD 2 million equity co-investment , as did PROPARCO, BIO’s peer organisation in France. The resulting ownership structure sees BOA Group holding 60 percent of shares with BIO and PROPARCO each holding 20 percent.

The greatest challenge of the newly created bank was to bring the Congolese people back into contact with the banking system. At least one generation of urbanites, let alone those in the provinces, have lived without using any form of banking. The few existing banks work almost solely with the business community. It is therefore essential to reshape, and in some cases instil completely new consumer behaviour, and eventually to inspire the confidence of the Congolese people so that they trust the banking system once again.

One of the main development impacts on the country is the provision of banking services for the private individual. This means enabling access to all financial services, and perhaps most notably to credit. As far as the business community is concerned, the bank aims to support many large companies, SMEs and micro-companies, the creators of wealth and employment which the country so badly needs.

Under the pressure of BIO, the BOA Group CEO gave its consent to BOA DRC to start a downscaling activity dedicated to the MSMEs (small SMEs without audited accounts) with the help (technical assistance) of a local actor, the FPM asbl (“Fonds pour l’inclusion financière au Congo”) funded by the KfW and the World bank. That activity was launched in Goma in October 2013 and is developing quite quickly. BOA DRC’s downscaling strategic initiative is rather unique in the country and will certainly have a demonstration effect on the banking community for the benefit of the MSME segment.

BIO supported the bank over the recent years by way of participation in capital increases that occurred in 2011 and 2012 as well as through the provision of a USD 300k technical assistance envelope at inception and through an active involvement at board level. A new capital increase will take place in May 2014 for USD 5 mln in order to support the geographical expansion of the bank (3 new agencies), especially outside Kinshasa (Lubumbashi and Matadi). BIO will participate on a prorata basis (USD 1 mln). In addition, BIO’s Board has approved a senior loan of USD 3 mln to support the growth of the new MSME loan book of the bank. Twenty to Forty MSMEs are expected to be financed through BIO’s credit facility.

Development impact:

Local economic growth: credit provision to SMEs; creation of assets and jobs

Website: www.bank-of-africa.net



  • Investment amount (€):

    Equity € 3.81 M; Debt € 2.17 M

  • Contract signature :

    2009, 2011, 2012, 2014

  • Nature of intervention :

    Debt & Equity

  • Development impacts :

    • 1 — Local economic growth