December 16, 2019
USADF and the Government of Senegal Announce $20 Million Co-Funding Blended Finance Partnership
Dakar, Senegal – December 14, 2019 – The U.S. African Development Foundation (USADF) and the Government of Senegal announced a five-year $20 million partnership on Saturday, December 14, 2019. The partnership, which is with La Délégation générale à l’Entreprenariat Rapide des Femmes et des Jeunes (DER), will invest in youth entrepreneurs, farmer cooperatives, producer associations, and small and medium-sized enterprises (SMEs) in Senegal. Leaders from USADF and DER gathered in Dakar last week for the signing of the memorandum of understanding (MoU).
The MoU signing was attended by USADF President and CEO C.D. Glin, U.S. Ambassador to Senegal Tulinabo Mushingi, General Delegate of DER Papa Sarr, and several other officials from each party and special guests.
The USADF and DER partnership is a five-year, $20 million commitment, with each contributing up to $2 million annually. This financial investment represents the two parties’ strategic interest and focus on expanding access to markets for youth and women entrepreneurs and SMEs in Senegal.
Over the last decade, USADF has invested $7.5 million in grant funding to more than 70 local enterprises in Senegal. These efforts have allowed us to improve the livelihoods of approximately 400,000 Senegalese.
Under the USADF-DER partnership agreement, USADF and DER will jointly provide low-interest loans through banks and microfinance institutions (MFIs) to Senegalese entrepreneurs and SMEs. The combination of loans and grant funding is an innovative model that matures small and micro entrepreneurs, farmer cooperatives, producer associations and SMEs, and makes them attractive for funding from other investment entities and programs.
USADF’s expertise in providing technical assistance, which leverages its pan-African network of technical partners, will be utilized in this partnership to provide capacity building measures that allow the recipients to grow and mature. Grants for non-productive capital expenditures, including technical assistance, will help to de-risk the loan portion, thus increasing the ability for recipients to successfully repay the loans and build credit to qualify for follow-on commercial lending.
This partnership seeks to address the “missing middle” that all too often gets ignored in development. These are the groups and enterprises that have successfully implemented an initial grant or two and have started to build capacity and a viable product but remain too small or inexperienced for commercial banks or funders to invest in them. USADF, through its local African technical partners, can work with these groups, provide a mixture of low-interest loans and grants that will serve as an intermediate step for groups on their path towards prosperity.
USADF’s Country Program Coordinator (CPC) and DER’s Entrepreneurship Promotion Staff will provide oversight, monitoring, and evaluation. Additionally, USADF’s Technical Assistance Partner in Senegal will provide training and technical assistance, monitoring and evaluation, and business advisory services to the investees, as well as reporting and general implementation support. USADF’s track record has proven that these types of investments and the provision of local technical assistance improve an enterprise’s productivity, grow revenues, increase incomes, and enhance market competitiveness.
In the past few years, USADF has focused on securing strategic partnerships with governments of African countries, whereby USADF matches the host government’s contributions to project development in their country. This has allowed USADF to maximize its impact and reach throughout the Sahel, Horn and Great Lakes regions in Africa. In addition to this agreement with the Government of Senegal, USADF has recently reached new agreements with the Government of Cote d’Ivoire, the Lagos State Employment Trust Fund in Nigeria, and the Government of Niger State in Nigeria.
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About the United States African Development Foundation (USADF)
The U.S. African Development Foundation is an independent U.S. government agency established by Congress to invest directly in African grassroots enterprises and social entrepreneurs. USADF’s investment increases incomes, revenues, and jobs by promoting self-reliance and market-based solutions to poverty. USADF creates pathways to prosperity for marginalized populations and underserved communities in the Sahel, Great Lakes, and the Horn of Africa. Annually, USADF’s grant assistance generates approximately $100 million in new economic activity. To learn more, please visit www.usadf.gov.
Communications Contact: Afia Frempong. Email: Comms1@usadf.gov.