UEMOA, Islamic Development Bank to establish USD 100 million SME fund
UEMOA and the Islamic Development Bank (IDB) have agreed to create a USD 100 million fund to support small and medium-sized enterprises (SMEs) in the UEMOA zone. The agreement was signed between the Central Bank of West African States (BCEAO) and the Saudia Arabia based Islamic Corporation for the Development of the Private Sector (ICD), a division of the IDB that focuses on developing private business. BCEAO is the central bank of UEMOA and conducts monetary policy for the eight member countries, which have the CFA franc as their common currency. The ICD has pledged to commit USD 30 million in initial capital for the SME fund and will work to attract additional investors to reach the target of USD 100 million. BCEAO will implement and monitor the fund. The central bank said it will further support SMEs by providing incentives to credit institutions and by developing additional financing instruments. Although a quarter of the world's Muslims live in Africa, Islamic finance has been slow to take hold on the continent. But that appears to be changing in West Africa. Last month, Côte d’Ivoire issued a CFA francs 150 billion (USD 247.5 million) Islamic bond, or sukuk. Senegal issued West Africa's first Islamic bond in 2014, raising CFA franc deal 100 billion. Niger has announced plans for a sukuk programme worth CFA francs 150 billion.