The Compagnie Financière Africaine Group (COFINA), the first African institution of mesofinance, announces its first securitization of receivables on the Regional Stock Exchange, the Common Stock Exchange of the eight countries of the region. Economic and Monetary Union of West Africa (UEMOA). This operation, a first for the region, involves a bond issue for an amount of 10 billion CFA francs, an unprecedented amount for a financial institution in West Africa. It consists of the sale, by the Group’s subsidiaries, Compagnie Africaine de Crédit in Côte d’Ivoire and COFINA Senegal, of their receivables to a common securitization fund set up for this purpose (« FCTC – COFINA »).
The transaction was arranged by Africa Link Capital Structuration, an entity of the Africa-based independent investment bank Africa Link Capital in charge of securitization operations. With a maturity of 18 months, the 1 million shares will be issued at the price of 10,000 CFA francs, with a face rate of 7.50% gross per year for a current subscription period until May 11, 2018 .
Securitization raises funds by selling a portfolio of receivables to a CTF. The latter also issues bonds with variable maturities. The recovery of receivables makes it possible to reimburse and remunerate bonds sold to investors. The FCTC acquires receivables directly from third party assignors by financing the acquisition by issuing marketable securities representing a pro rata interest in the assets of the fund.
« Africa’s lack of access to capital for entrepreneurs and SMEs is a major impediment to their growth, with only 6.4 per cent of sub-Saharan African SMEs reporting having access to finance from financial institutions » Jean-Luc Konan, founder of Cofina. We are looking for innovative mechanisms to optimize the use of equity while strengthening our credit capacity and broadening the investor base. »
« The securitization of receivables offers a response to the problem faced by the COFINA Group by reducing the exposure levels for certain customers and the concentration ratios in certain business sectors, » adds Serge Tidiane Diop, General Manager of the ALC Group. This offer is suitable for clients seeking more sophisticated financial engineering to take advantage of the upscaling of West African economies. »
About COFINA Group
Founded in 2013, the COFINA Group is the first African financial institution dedicated to mesofinance, the « missing link » between microfinance and traditional banking, which offers the opportunity for African SMEs (90% of private companies on the continent) to access more easily to credit. Present in six French-speaking African countries (Congo-Brazzaville, Ivory Coast, Gabon, Guinea Conakry, Mali, Senegal), COFINA has already financed more than 40,000 projects, of which 52% are run by women entrepreneurs. In recent years, COFINA has established itself as the benchmark for financing small and medium-sized businesses in French-speaking Africa. COFINA has set itself the challenge of reducing the financial divide suffered by a large part of the new African middle class.
With more than 1,000 employees, COFINA manages a portfolio of more than 108,000 clients spread over its six subsidiaries. The institution has a balance sheet total of 96 billion CFA francs.
For more information: groupecofina.com