IFC, BOAD, and BII Back $90M Securitization to Fund MSMEs in West Africa

In a landmark initiative to bolster financial inclusion and empower small businesses across West Africa, the International Finance Corporation (IFC), the West African Development Bank (BOAD), and British International Investment (BII) have announced significant anchor investments in a XOF52 billion ($90.4 million) bond issued under the NSIA Banque Benin 2025–2030 securitization program.

The funding, channeled through Keur Samba, BOAD’s securitization special purpose vehicle (SPV), is a pivotal step in mobilizing long-term, local currency financing for micro, small, and medium-sized enterprises (MSMEs) in Benin, Senegal, and Togo. It is the first-ever securitization of its kind in Benin and a major milestone for regional capital market development under the West African Economic and Monetary Union (WAEMU).

Securitization to Unlock Capital and Spur Economic Growth

Securitization—where banks bundle and transform illiquid assets like loans into marketable securities—plays a crucial role in expanding access to finance in emerging markets. In this case, NSIA Banque Benin's loan portfolio has been partially securitized to enable the bank to scale lending to the MSME sector.

The transaction structure includes:

• IFC’s investment of nearly XOF14 billion (approx. $25 million)

• BOAD and BII contributing XOF8 billion each (approx. $14 million)

• Additional capital from local and regional investors, including commercial banks, pension funds, insurance firms, and individuals

The bond offering was oversubscribed by 15%, underscoring strong investor confidence and appetite for regional securitized assets.

A Focus on Inclusion and Impact

The XOF52 billion bond proceeds will directly finance NSIA Banque Benin’s expansion of MSME lending over the next three years. Notably:

• 25% of funds are earmarked for women-led MSMEs (WMSMEs)

• 10% is allocated to climate finance initiatives, reflecting a growing commitment to green investments in the region

This structured approach ensures that underrepresented groups and sectors—often overlooked in traditional finance—receive targeted support.

Ethiopis Tafara, IFC’s Vice President for Africa, emphasized the strategic intent:

“This transaction represents a major step forward for MSME financing in the WAEMU region. By supporting the first multi-originator, multi-country securitization vehicle in West Africa, IFC is mobilizing long-term local currency resources to improve access to finance for small businesses, including in agriculture, women-led enterprises, and climate-focused ventures.”

A Model for Regional Capital Market Development

This transaction is the third successful operation under the Keur Samba program, following two earlier securitizations in Côte d’Ivoire. The program is spearheaded by BOAD Titrisation, BOAD’s subsidiary specializing in securitization, and represents the first-ever multi-originator, multi-country securitization platform in WAEMU.

BOAD President Serge Ekué hailed the initiative:

“Through the Keur Samba program, BOAD is deploying innovative financing tools tailored to our region’s realities. This first-of-its-kind operation in Benin reflects our commitment to delivering sustainable responses to the private sector’s financing needs.”

Chris Chijiutomi, Managing Director and Head of Africa at BII, added:

“This milestone securitization proves the potential of mobilizing local capital for development. It supports inclusive and sustainable economic growth by expanding financing for SMEs in Benin, Senegal, and Togo.”

World Bank Group Support and Global Development Alignment

The World Bank Group played a catalytic role in preparing the transaction. Through its Joint Capital Markets Program (J-CAP), it offered technical assistance to modernize securitization laws, improve investor confidence, and support credit enhancement mechanisms. J-CAP’s work in WAEMU is funded by several donors, including Germany, Switzerland, Norway, Luxembourg, Japan, Australia, and the Netherlands.

In addition, IFC’s investment is partly supported by the IDA20 Private Sector Window Local Currency Facility, which helps deliver long-term, local currency financing that is often unavailable in frontier markets.

A Blueprint for Scalable Private Sector Financing

This transaction not only represents a first-of-its-kind financial innovation in Benin but also provides a scalable model for mobilizing domestic capital for small business finance across West Africa. By bridging the gap between capital markets and MSMEs, it fosters job creation, gender inclusion, climate resilience, and sustainable economic development.

As Africa continues its push for self-reliant, inclusive growth, this bold securitization marks a turning point—proving that collaborative, well-structured financial engineering can unlock the capital needed to empower small businesses and transform local economies.