The European Commission together with FMO, the Dutch entrepreneurial development bank, have scaled up the NASIRA financial guarantee to support small COVID-19 affected entrepreneurs in Africa and EU Neighbourhood.

Marjeta Jager, Deputy Director-General for International Cooperation and Development at the European Commission, said: “Small businesses in our partner countries are hit especially hard by the coronavirus pandemic.”

“The reinforcement of the NASIRA guarantee to reach more of those in need is part of the EU global response package to COVID-19 as a means of mitigating social-economic impacts. It will provide a vital lifeline for hundreds of businesses affected by the pandemic.”

The measures are a joint response and include a top-up of €25m from the European Fund for Sustainable Development (EFSD) and an expansion in scope to support COVID-19 affected entrepreneurs.

Also, NASIRA received €2.5m from FMO’s Dutch Government Fund MASSIF.

With these adjustments, the NASIRA guarantee will help small businesses in Africa and the EU Neighbourhood to stay afloat during and after this pandemic.

Linda Broekhuizen, FMO’s Chief Investment Officer, said: “Whilst the COVID-19 pandemic is a public health crisis in the first place, the related economic impact is also a grave concern. The poorest people will be hit hardest, and inequality will rise.”

“With the expansion of the NASIRA guarantee we are very pleased we can further our outreach to small and medium-sized businesses and the communities that depend on them in Africa and EU Neighbourhood. Providing liquidity is crucial in these difficult times.’’

NASIRA is an innovative financial program that supports young, female, and migrant entrepreneurs in Sub-Saharan Africa and countries neighbouring Europe. 

As off today the scope is widened to also reach out to small COVID-19 affected entrepreneurs in the same regions.

NASIRA uses guarantees to allow local banks to on-lend to underserved entrepreneurs.

The goal is to allow local banks to provide loans to groups they normally perceive as too risky.

By so-called ‘risk-sharing’ NASIRA reduces the perceived and real risks of lending to vulnerable and underserved parts of the population.

The NASIRA guarantee is part of the EU External Investment Plan, which, by investing €4.6bn in EU funds, is set to leverage an additional €47bn in total investment from the public and private sector.

It will enable small business owners to access affordable loans through local banks, microfinance institutions and other non-banking financial institutions.