The United Kingdom Government, through its development finance institution, British International Investment (BII) has announced a $25 million risk-sharing facility with Ecobank Sierra Leone to stimulate private sector growth in high-impact sectors of the economy.
The facility, which includes a comprehensive technical assistance program, will support Ecobank in increasing lending to ambitious businesses in this frontier market.
The private sector plays a crucial role in Sierra Leone’s economy, primarily through small and medium-sized enterprises (SMEs) that employ around 70% of the population. However, these businesses often struggle to access capital due to various factors, including limited financial products, high collateral requirements, and short-term loan tenors.
The new facility will support local currency lending, demonstrating BII’s ability to act as a first mover in frontier markets. By increasing credit limits and extending loan tenors, the investment will help Ecobank Sierra Leone grow its loan book and boost business growth, job creation, and private sector contribution to the economy.
This transaction marks a significant milestone as the first investment under the Africa Resilience Investment Accelerator (ARIA), a collaborative initiative launched by BII and FMO, the Dutch entrepreneurial development bank. ARIA aims to boost investment in frontier markets like Sierra Leone.
The Sierra Leone economy faces challenges including a depreciating currency, a large trade deficit, and insufficient infrastructure investment. BII’s investment targets critical sectors such as renewable energy, agriculture, agro-processing, infrastructure, and manufacturing to spur economic growth and development.
UK Minister for Development, Anneliese Dodds, expressed her delight at the partnership, stating that it will support local currency lending, bring much-needed capital into high-impact sectors, and contribute to job creation and economic growth.
Samir Abhyankar, MD and Head of Financial Services at BII, highlighted the facility’s potential to be a game-changer for Sierra Leone, providing much-needed capital for local businesses to accelerate their growth, spur job creation, and deepen impact.
Sebastian Ashong-Katai, Managing Director of Ecobank Sierra Leone, expressed his enthusiasm for the partnership, emphasizing its importance in boosting Ecobank’s lending capacity and supporting Sierra Leone businesses.
Alex Kucharski, BII’s Head of West Africa for ARIA, added that ARIA aims to unlock investment in Sierra Leone and that the investment in Ecobank Sierra Leone will bring much-needed growth capital to underserved businesses in the country.