As the leading bank for SMEs in Côte d'Ivoire, Bridge Bank Group is stimulating economic development through customized financing for the country’s fast-growing SME segment. Adonis Seka, Deputy Managing Director at Bridge Bank Group Côte d'Ivoire, discusses the bank’s successful strategy, expanded services and risk management amid rising SME demand for financing.
Global Finance: How do global and regional economic factors influence demand for SME financing in Côte d’Ivoire?
Adonis Seka: Côte d’Ivoire’s SMEs, like businesses worldwide, are affected by fluctuations in the cost of imported materials, freight and international logistics. Since the COVID 19 pandemic, these costs have risen sharply, with prices tripling some cases. There have also been long delays in the supply chain.
As a result of these global factors, our SME customers have an increased need for import financing in order to secure supplies to continue their industrial or distribution activities. They are also looking for financing to address rising operating costs and a relative decline in profitability.
GF: How is Bridge Bank extending its products and services to SMEs in response to changing demand?
AS: Bridge Bank’s traditional working capital financing offer for SME customers has been extended to include trade finance products, such as foreign currency drafts and documentary credits, to enable SME customers to secure international purchasing operations while guaranteeing them payment terms in line with their receipts.
We have also organized training sessions for SME customers to help them to access the Central Bank’s refinancing window to obtain cheaper foreign currency for their supplies. The rising cost of materials is a critical factor in the competitiveness of our SME businesses.
Bridge Bank also offers SME-focused cash management solutions, such as check readers and cash pick-up, to facilitate day-to-day cash management needs. SME customers also use our online payment services for salaries, regular suppliers, social security contributions and taxes.
GF: Which are Bridge Bank’s fastest-growing SME customer segments?
AS: Historically, the strongest SME growth has been in the retail and industrial sectors. The importation of food products, the import and sale of construction equipment and the primary processing of local raw materials are also very dynamic sectors in Côte d’Ivoire.
GF: How does Bridge Bank help SMEs overcome challenges to obtaining financing?
AS: For SMEs, the main difficulties in accessing financing lie in asymmetric information, lack of financial transparency and reliability of financial statements and insufficient collateral.
Our analysis takes into account not only the SME’s performance, but also its portfolio and track record. The ultimate aim is to grant credit to the SME considering a range of criteria in addition to the balance sheet.
Bridge Bank uses independent tools for accessing financial information and company solvency in order to obtain a more realistic picture of the customer for financing applications than we would achieve from the customer’s financial data alone.
In addition, Africa Guarantee Fund (AGF), our institutional partner and third-party guarantor, raised our portfolio guarantee from 10 billion CFA francs to 15 billion CFA francs. This enabled us to increase our financing for SMEs while sharing our risk.
We have also secured a 60 billon FCFA francs risk sharing facility with IFC (World Bank Group) for partial guarantees of loans granted to some of our selected SME clients. This strategic choice demonstrates our commitment to strengthen our SME bank positioning by increasing the share of these specific clients in our overall portfolio.
It is also important to mention that from 2024, and as part of its Corporate Social Responsibility (CSR) undertakings, BBG CI will be in a position to offer personalized support to SMEs involved in ecological initiatives and focused on environmental protection.
GF: How does Bridge Bank manage the risks associated with its SME strategy?
AS: Bridge Bank draws on its proven knowledge of practices in this segment, which it has supported for over 17 years. We developed a customized approach integrating both borrower and project analysis to provide financing solutions that are not based solely on the SME’s balance sheet. We also factor in each customer’s global environment and operational realities.
In addition, we closely monitor our customers to identify weaknesses at an early stage and work with them to develop appropriate solutions. This approach limits the number of default and preserves the quality of our portfolio.
Commitment is one of Bridge Bank’s core values, and we are committed to serving routine and emerging financing needs of our customers. Our strength in the SME segment lies in our flexibility and ability to offer tailor-made solutions at every stage of each customer’s development.