The study Public Development Banks (PDBs) and Other Public Agencies, conducted under the Team Europe Initiative Investing in Young Businesses in Africa (IYBA), explores how European partners support African public development banks and other public institutions to improve access to finance for early-stage businesses in sub-Saharan Africa.
Bridging financing gaps for early-stage businesses in sub-Saharan Africa
Access to finance remains a major challenge for young businesses in sub-Saharan Africa. Many struggle to secure funding because they lack collateral, have limited credit histories or face high interest rates.
Public development banks (PDBs) can help bridge this gap. Unlike commercial banks, they can offer longer-term financing and take on greater risks to support businesses that would otherwise struggle to access funding.
The study highlights how PDBs support small businesses through loans, guarantees and equity investments, alongside non-financial services such as technical assistance and training. By working with these institutions, European partners can build on their local knowledge and networks to make financing more accessible to young businesses.
The cost of not collaborating for European actors, African PDBs and SMEs
The study also highlights a key challenge: European partners often support African development banks through separate initiatives, with limited coordination. This can lead to duplicated efforts, overlapping activities and inefficient use of resources.
Stronger collaboration could help address these challenges. By sharing expertise, coordinating technical assistance and developing joint financing solutions, European and African partners can make better use of available resources and provide more effective support to young businesses. Better coordination can help turn existing mecanisms into greater impact on SMEs, more consistent support, mutually reinforcing efforts and a better allocation of resources.
Read the full study to explore the findings and recommendations for stronger partnerships between European actors and African public development banks.
