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(Ecofin Agency) – To address the funding gap facing startups and SMEs, the Ivorian government will set up an investment facility that will allow investors to acquire stakes in the concerned companies and startups.
The Ivorian government is planning a Long Term Investment Facility (LTIF) to improve the financial inclusion of start-ups and small, medium, and large enterprises (SMEs), several local media outlets reveal.
The FILT, also called CDC-CI Capital, will be created on June 19 as a subsidiary of the national deposit and consignment fund CDC-CI. It will be established as an open-ended joint stock company endowed with a CFAF 38 billion ($63 million) capital to be invested in two windows. Specifically, CFAF8 billion will be invested in the first window dedicated to startups and SMEs. The second window, endowed with a CFAF30 billion budget, will finance large companies involved in environmental projects.
The investment facility will be an alternative financing mechanism that will allow investors to make equity or quasi-equity investments in companies. It aims to promote investments in innovative high-growth start-ups and SMEs in the pre-seed and other venture capital phases, especially those led by women and the youth.
“This facility could be opened up to other investors in the future to make it a regional tool for financing priority projects,” said Arthur Coulibaly, coordinator of the Competitive Value Chain Program for Employment and Economic Transformation (CCEPET).
According to the World Bank, Côte d’Ivoire faces major challenges that prevent it from fully benefiting from its digital economy. The challenges are notably low digital inclusion in rural areas, inadequate policies and regulations, and insufficient funding for private sector development.
Thanks to actions taken by the government, the financing situation has improved. According to World Bank data, the ratio of domestic credit to the private sector has risen from 13.1% in 2010 to 21.1% in 2020.
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