SANAD helps with COVID-19 crisis recovery through innovative digitalization program
Targeted loan and grant facilities to strengthen small businesses and financial institutions that sustain them
Frankfurt, February 15, 2021 – The Technical Assistance Facility of the SANAD Fund for MSME (SANAD TAF) has launched a new COVID-19 response program for micro, small, and medium enterprises (MSMEs) and microfinance institutions (MFIs) in the Middle East and North Africa. Through a two-pronged approach that combines SANAD debt financing with a grant component to facilitate the implementation of digital solutions, the SANAD TAF aims to help entrepreneurs and the financial infrastructure that supports them in overcoming the economic challenges of the coronavirus crisis.
In a first-of-its-kind initiative, the SANAD TAF is enhancing the fund’s crisis response measures by supplementing SANAD financing with three types of additional support. The first aims to bolster the stability and agility of local entrepreneurs in confronting a turbulent environment by enabling them to ramp up digital operations: MSMEs that use a SANAD-facilitated loan for new investments in their business, such as upgrading IT equipment or systems, are eligible to receive a portion of the loan as cash back. The second facility takes direct aim at costs incurred by the crisis by covering a portion of MFI partner institutions’ expenses for pivoting its operations – especially the transition to digital systems and processes – in response to the unprecedented environment. And finally, the third focuses on supporting the ability of SANAD’s partner MFIs to provide liquidity to MSMEs in uncertain circumstances, by financing part of credit risk insurance or credit guarantees from a local insurance company.
The initiative will be available to selected SANAD partner institutions until the end of 2022.
Ines Ebrecht, Chairperson of the SANAD Technical Assistance Facility, said: “Running your own business can be complex, even outside of an economic crisis. That is why the SANAD TAF has always taken a comprehensive, holistic approach to promoting an environment that supports entrepreneurial success. With this new initiative, we want to provide resources to alleviate the impact of the COVID-19 crisis while simultaneously encouraging investment in digital solutions: tools that will make MSMEs and their financial service providers even stronger than before.”
The SANAD Fund for MSME finances micro, small, and medium enterprises and low-income households in the Middle East and North Africa via qualified local lenders. SANAD thereby fosters economic development and job creation – including youth employment – agriculture, affordable housing, and innovations in finance and financial technologies. SANAD strives to meet these goals by providing debt and equity financing to its local partners.
The SANAD Technical Assistance Facility (SANAD TAF) multiplies the fund’s impact and outreach through capacity-building with partner institutions, developing financial infrastructures according to the principles of responsible finance and conducting much required research and development. The SANAD Entrepreneurship Academy, an initiative of the SANAD TAF, encompasses a range of programs to support business owners throughout SANAD’s target region. By working together with local organizations that drive incubation and acceleration projects, the Entrepreneurship Academy provides entrepreneurs with guidance, resources, mentoring, networking opportunities, the chance to receive financial backing, and other means necessary to turn good ideas into successful enterprises.
An impact investment fund advised by Finance in Motion, SANAD’s investors include the KfW Development Bank, which initiated the fund; the German Federal Ministry for Economic Cooperation and Development (BMZ); the European Union; Switzerland’s State Secretariat for Economic Affairs (SECO); OeEB, the Development Bank of Austria; Germany’s GLS Bank and GLS Treuhand; the Dutch development bank FMO; and Calvert Impact Capital.
For more information on the SANAD Fund for MSME, please visit: www.sanad.lu
For more information on Finance in Motion, please visit: www.finance-in-motion.com
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