Line of Finance to Support and Empower Vulnerable MSMEs in Chad Through PROMFIT-II Project

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Empowering Chad's MSMEs: Line of Finance to Support and Empower Vulnerable MSMEs in Chad Through PROMFIT-II Project

N'Djamena, Chad – November 14, 2024 – The PROMFIT-II Project, part of the Islamic Development Bank’s (IsDB) and the Islamic Solidarity Fund for Development’s (ISFD) Strengthening the Economic Resilience of Vulnerable Enterprises flagship program, has launched the Line of Finance (LoF) to enhance the economic resilience of vulnerable MSMEs in the Republic of Chad. This LoF is a component of the ISFD innovative economic empowerment approach which encompasses access to finance, technical assistance, and access to markets to foster economic inclusion across Chad.

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The PROMFIT-II project is jointly financed by IsDB, ISFD, and partner financial institutions in partnership with the Government of Chad with a total cost of US$25 million and is implemented by the Ministry of Vocational Training and Crafts in Chad.

Key Highlights of the PROMFIT-II Project:

  • Selection of Leading MFIs: The project has identified Chad’s best Microfinance Institutions (MFIs) to provide Islamic, Sharia-Compliant line of finance for MSMEs.
  • Integrated Economic Empowerment: Targeted support will empower MSMEs to recover from economic crises and sustain inclusive growth for individual entrepreneurs.
  • Shariah-Compliant Financing: The line of finance will enable partner financial institutions to deploy Sharia-Compliant products to vulnerable MSMEs.
  • Support for Vocational Graduates: The initiative will also assist professionals who have completed vocational training to launch their own businesses.

Implementation Framework:

  • Financing will be channeled through selected partner financial institutions in Chad that demonstrated a strong commitment to Islamic finance during the first phase of PROMFIT.
  • The MFIs will support productive sectors affected by the pandemic, including agriculture (e.g., Gum Arabica, sesame, legumes, livestock), ensuring operational efficiency and good repayment track records.

The PROMFIT-II Project also Includes:

  1. Offering technical assistance and capacity building for implementing partners.
  2. Implementing a Management Information System (MIS) for MFIs.

Impact:

The PROMFIT-II project aims to achieve the following outcomes:

  • 10,750 entrepreneurs benefiting from Sharia-Compliant financing, with at least 50% women and 30% youths.
  • Creation or maintenance of at least 21,500 job opportunities, with at least 30% women and 30% youths.
  • Providing 2,000 entrepreneurs non-financial support in various business skills, with at least 30% women  and 30% youths.
  • Providing MIS system to partner financial institutions,
  • Training of 100 staff from partner financial institutions and government agencies on Sharia-Compliant products and financing.

The PROMFIT-II Project is part of IsDB-ISFD’s flagship SERVE program that aims at strengthening resilience of MSMEs in IsDB’s member countries, enhancing their capacity to sustain business and create jobs through providing the needed lines of finance.