WEST AFRICA – The African Development Bank (AfDB) has agreed to invest £12 million euros (US$13.37m) in the capital of the Yeelen fund to enable it expand its capacity to support West Africa’s financial sector.

Yeelen Financial Fund LP is a 12-year investment fund domiciled in Mauritius and Lomé. It aims to a achieve a capitalization of 65 million euros (US$72.44m) in order to invest in the financial institutions of the eight countries of the West African Economic and Monetary Union (UEMOA).

The WAEMU region is made up of Eight coastal and Sahelian states namely: Benin, Burkina, Côte d’Ivoire, Guinea-Bissau, Mali, Niger, Senegal and Togo.

According to AfDB, the fund will invest capital in banks, microfinance institutions (MFIs), financial technology companies (Fintechs) and insurance companies.

“The aim is to help these institutions comply with regulatory requirements in terms of minimum capital and equity,” AfDB said in a statement.

The bank further noted that the Yeelen fund also aimed to support the expansion of financial institutions by widening their reach to financially excluded populations and by developing credit and insurance products adapted to their conditions.

“Through this investment, the African Development Bank intends to strengthen financial inclusion in the WAEMU zone,” AfDB said.

According to the AfDB, the WAEMU zone remains one of the areas least well served by financial products such as micro-credits, and by insurance products such as insurance, micro and meso-insurance.

“This fund will help strengthen level 2 and 3 financial institutions, enable them to comply with regulatory requirements and unlock funding for SMEs and populations underserved by the traditional banking system, in particular women, young people and populations in rural areas, ” said Stefan Nalletamby, AfDB’s Director of Financial Sector Development Department.

Ultimately, Yeelen aims to create nearly 1,500 jobs, 40% of which are occupied by women, and encourage and help banks and insurance companies to develop innovative products using digital finance with the aim of empowering women and young people, and ultimately reducing poverty.

Founded on January 10, 1994 in Dakar, the WAEMU’s main objective is the construction of a harmonized and integrated economic area in West Africa.

The UEMOA is an attractive and growing space, with favorable demographic data and displaying an overall GDP of around 81 billion euros. The IMF forecasts around 6.5% growth in this area over the period 2019-2020.