geo/djibouti
Access to finance also remains a problem, where 53 percent of women-led small and medium enterprises (SMEs) do not have access to credit and 70 percent of surveyed MENA female entrepreneurs agree that lending conditions in their economy are too restrictive and do not allow them to secure the financing needed for growth.
A Partial Credit Guarantee (PCG) Fund can increase access to credit for MSMEs by providing third-party credit risk mitigation to lenders. In case of default, the fund mitigates risk by absorbing a portion of the lender’s losses on the loans made to MSMEs.
Only 5% of formal businesses in Djibouti receive bank financing, according to estimates.
Banks in Djibouti are fairly liquid, but they are often unwilling to lend to micro, small and medium size enterprises (MSMEs) because of low appetite for risk and insufficient collateral.
