Final Project Sébastien Weber Open Learning Campus _ Unlocking Investment and Finance in EMDEs

1. Rural Finance Facility
New Synergies and Innovations for Scaling-Up Rural Finance in Chad
Final Project Sébastien Weber
Paris, July 2019

2. Contextstudy
Oil
(+Gold
Uranium)
Agriculture
Finance &
Telecom
Livestock
Access to
Finance
Taxes
Electricity
Governance
Political
Stability
Business Constraints***
Sources:
* Making Finance Works For Africa_AfDB / http://18.215.204.142/country/chad
** IBRD World Bank Group, https://data.worldbank.org/country/chad
*** Enterprise Surveys, Chad 2018 Country Profile, IBRD World Bank Group
At a Glance*
- Population (2017) : 14,899,990
- GDP per Capital (US$) 2017 : 662,5
- Mortgage Interest Rate
----------------------------- = 8%
Mortgage Term
- Account % (age 15+):
2014 : 12%
2017: 22%
- Digital Payments :
2014: 9%
2017: 19%
Economic Review ** :
- GDP (US$) 2018: 11,303 Billion
Small growth after Deep Recession
- Public Dept (% GDP) 2017: 53 %
- Fiscal Revenu (% GDP) 2017: 12,1 %
- Agriculture = 50% GDP
- Oil Producing country since 2003
- External Ressources:
- _ODA (USD) 2017 : 674,3 M
- _ FDI: 335 M
- _ Other grants: 20,8 M
Humanitarian Aid :
- +50% ODA
Private Sector

3. Development
Goals
As IFC Rural Finance Specialist based in N’Djamena, my task is to support
both Decent Work & Economic Growth (SDG #8) and Climate Action (SDG
13) through Rural Finance Development in Chad.
Development problem:
§ Under-investment on crops and livestock due to climate risk (drought)
§ Small access and high cost of rural finance
The Republic of Chad fixed as correlated objectives* for 2030:
§ Promoting Sustainable Economic Growth with a focus on family farming
(crops and livestock)
§ Implementing Innovative Mechanism to Mobilize National Saving and
Foreign Private Capital.
Budget available:
§ IFC agrees to mobilize part of its worldwide Rural Finance Facility to
share the risks and support innovation in a first move: US€ 3M of Grants
can be engaged by 2022 with private sector
* Source :“Vision 2030,The Chad That We Want”, Republic of Chad, July 2017

4. WorkInProgress
Partnersand
Finance
Opportunities
ON-GOING PROJECTS*
§ Reorganization of the Microfinance Sector (UNPD_Ministry of Women
and Poverty: 2016_2020)
§ Climate Resilient Agriculture and Productivity Enhancement Project
(IBRD_Ministry Of Agriculture: 2018_2023: USD 44,6M)
§ Rural Mobility and Connectivity Project (IBRD_Ministry of Transport and
Infrastructure: 2018_2025: USD 30M)
SUSTAINABLE INVESTMENTS
§ IFC’s investments:
§ Millicom Chad (USD 76M)
§ Ecobank Chad (USD 21,2M)
§ Other investments: Société Générale du Tchad (€ 12,5M)
Our development goals are targeted by different
Ministries, Projects and Private Companies :
Þ Create new synergies & business relations to serve the SDG’s
objectives: capitalize project costs + organize Agri Finance
Forum + launch Agri Finance Task Force with public/private
sectors closely associated
Þ Take advantage to integrate new partners (Ministry of Finance,
Insurance Sector, Agribusiness MNCs, …) and capitalize with
other areas (CIMA for microinsurance development, Feed Future
Senegal for value chain approach)
* Source :World Bank Group : http://projects.worldbank.org/P164747

5. Priority
Interventions
Short Term Objective, create the market :
§ A rural finance mobile platform is launched with access to Saving, Insurance and Credit
§ New extension services (Climatic Information, Technical Assistance, Access to Market, …) are
possible to develop through new partnerships on the platform
Rural Finance Facility in Action :
§ A 3 years (USD 5M) co-financing agreement is signed Between Millicom (USD 2M),
Ecobank (USD 1M) and IFC (USD 2M) to 1° create the digital platform and 2° run a 2 years
pilot providing saving and credit at least to 50 000 crops and livestock farmers
§ A 2 years (USD 1M) co-financing agreement is signed between a Local Insurance
Company (USD 0.5 M) and IFC (USD 0.5 M) to create the tailored insurance products to
cover crops and livestock against drought and principal diseases
§ A 2 years (USD 1M) Technical Assistance and Training program is financed by IDRB to the
both Ministry of Finance and Ministry of Agriculture to develop internal skills and train
financial sector (Bank & Insurance) in rural finance
(Expected) results :
§ Digital Rural Financing meets success with more than 75 000 Millicom’s rural clients active on
their saving account. 40 000 (40%) reached their saving objective and obtained a first crop or
livestock loan with +95% of reimbursement rate
§ 5 new index-based climatic insurance products have been created and positively tested by the
Local Insurance Company with a “dry run pilot”
§ A massive awareness raising program “Insurance for All” concerned more than 1M farmers in
different areas and communities

6. Development
FinanceStrategy
§ Create the Market with available finance
Þ Innovations are designed, tested, improved and ready
for scaling up based on an granted project
Þ Rural Finance Market is boosted on both offer and
demand sides
§ Catalyze private funds to make it sustainable
§ Project is transformed into a registered company,
subsidiaries of Millicom and Ecobank with a
Capital of USD 6M
§ Private Equity Investors bring USD 3M around
the table to invest in marketing and new services
integration
§ “Maximizing Finance For Development”
§ Climate Finance:“Climate Insuresilience
Fund” invests in the local Insurance Company
to support climatic insurance development
§ Guarantees: MIGA provides specific
guarantees to develop Ecobank rural’s
portfolio (with mandatory climatic coverage)
USD 3M from IFC
+ USD 1M from IBRD
+ USD 3M from Private
= USD 7M
+ USD 3M from Private
Investors
= USD 10M
+ USD 3M from Climate
Insurance Fund
+USD 8M from MIGA
=> USD 21M dedicated to
Rural Finance in Chad