Henry Kohn is a correspondent at Today News Africa based in Washington, DC. Henry writes on foreign policy, politics, and the State Department. He has worked in Europe and West Africa and has a dual Bachelor’s degree in French and Environmental Science and Policy from Duke University
The U.S. International Development Finance Corporation (DFC) and the FMO, the Dutch entrepreneurial development bank, on Thursday, announced a new co-financing facility to support women- and youth- owned businesses and entrepreneurs in agriculture and rural areas, as lenders in low-income countries face a liquidity crunch and the Covid-19 pandemic rages on.
The DFC-MASSIF COVID-19 Response Co-Financing Facility, the “first of its kind” for the DFC, will provide $75 million to “financial intermediaries” that are “facing liquidity strains” in developing countries, which will allow them to continue to lend to micro-, small-, and medium-sized businesses.
As a part of DFC’s 2X Women’s Initiative at least 50% of borrowers are expected to be women entrepreneurs.
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“As the COVID-19 pandemic continues to adversely affect financial markets, especially businesses in developing countries owned by women, DFC is constantly looking for innovative partnerships like this to provide economic relief and development impact,” James Polan, DFC Vice President of Development Credit said.
“This co-financing facility combines DFC and FMO’s joint development focus, commitment to supporting women and other underserved populations,” Polan said, “and financial expertise to provide essential liquidity to developing markets.”
As “America’s development bank,” the DFC “partners with the private sector” to invest “across sectors” and in small businesses and women entrepreneurs to create jobs in “emerging markets,” according to the DFC’s website.
As of December 31, 2020, the DFC had 258 active projects going back to 2007 in nearly every country on the African continent. It currently has $8.2 billion in “active commitments” in Africa, the second highest for a region after Latin America.
For its part, the FMO, in particular MASSIF, the financial inclusion fund it manages, has ample “co-financing experience and expertise in reaching borrowers in developing countries,” the DFC noted in a statement.
“The partnership with DFC strengthens our ability to address the immediate COVID-19 recovery and long-term challenges the pandemic poses for our MASSIF clients,” Jeroen Harteveld, portfolio manager at MASSIF said. “We take the fact that DFC is willing to build on our 50-year track record and experience in emerging markets as a big compliment.”