International Finance Corporation (IFC), a member of the World Bank Group, is considering a $20 million senior loan to Vista Bank Burkina to expand lending to small businesses in Burkina Faso, using blended finance support to help de-risk credit in a challenging market.
The proposed five-year facility will be disbursed in two equal euro-denominated tranches, according to a project disclosure. At least 25% of the loan proceeds will be allocated to women-owned or women-led micro, small and medium enterprises.
The first tranche is expected to be processed under IFC’s MSME Finance Platform, an initiative designed to increase credit to underserved small businesses in emerging markets.
It will be supported by a pooled first-loss guarantee from the International Development Association’s Private Sector Window Blended Finance Facility.
IFC said the concessional support is needed because projects under the platform would not be bankable without risk-sharing in difficult operating environments. The subsidy level for the SME envelope is estimated at 6.3% at the programme level.
The financing is aimed at addressing limited access to longer-term funding for MSMEs in Burkina Faso, where lenders face elevated risk and small businesses often struggle to secure formal credit.
IFC expects the facility to support lending to businesses in trade, services, transport, construction and public works.
Vista Bank Burkina is the fifth-largest bank in Burkina Faso. Founded in 1973, the bank is about 78% owned by Vista Group Holding, a pan-African banking and insurance holding company established in 2015.
The bank has traditionally focused on large corporates, multinationals and retail clients, but has been expanding its MSME business through a network of 17 branches.
IFC said the investment will be complemented by an advisory services programme to strengthen Vista Bank Burkina’s risk management framework.
The development finance institution said its support would provide medium-term funding that is not readily available in the local market, while also helping improve environmental, social and governance standards.
The project has been classified as FI-2 under IFC’s sustainability framework, indicating limited environmental and social risks that can be addressed through mitigation measures. The financing will exclude coal, coal-related activities, non-RSPO palm oil, upstream oil and gas, mining and other higher-risk transactions.
The proposed investment forms part of IFC’s wider push to use blended finance and guarantees to expand private-sector lending in lower-income and higher-risk markets.
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