The webinar brought together practitioners engaged in implementing innovative financing mechanisms in Benin, Togo, and Senegal.
Introduction
Entrepreneurship support structures (ESOs) and financial support providers (FSPs) have played a pivotal role in the development of entrepreneurial ecosystems in West Africa. By facilitating access to resources, supporting entrepreneurs, and structuring stakeholder dynamics, they have contributed to the growth and resilience of local businesses. However, access to financing has remained a major challenge, particularly for startups and growing companies.
Traditional financing mechanisms, often based on strict requirements such as formal collateral or credit histories, have proven ill-suited to the realities faced by a large proportion of entrepreneurs, particularly women and youth. In response to these constraints, new financial instruments have emerged, such as gender-sensitive loans, crowdfunding, and other innovative solutions that help better share risks and reduce barriers to entry.
Despite their potential, these tools have remained in the exploratory phase for many ESOs, which have sought to understand how to design, structure, and effectively deploy them within their specific contexts. Adapting to local realities, entrepreneur profiles, and institutional environments has proven essential to ensuring their relevance and impact.
In this context, the webinar brought together practitioners engaged in implementing innovative financing mechanisms in Benin, Togo, and Senegal. It provided a space for discussion around concrete experiences, lessons learned, and challenges encountered, as well as the conditions necessary to adapt and replicate these approaches in order to sustainably strengthen access to financing for entrepreneurs.
- Alice Petetin: I&P Togo
- Ouma Sani: Women’s Investment Club Senegal
- Augustin Kintokonou: Investi'SENS Benin
- Dr. Leva Rouhani: Hwéfa Consulting
Key Themes and Lessons
The discussion highlighted several cross-cutting lessons regarding the conditions necessary for the design, deployment, and sustainability of innovative financing mechanisms led by ESOs in West Africa. The main takeaways are presented below.
- A structural mismatch between financial offerings and the needs of SMEs: The discussions highlighted that the main challenge is not a lack of capital, but a persistent mismatch between available financial products and the realities of SMEs. Many businesses, particularly those in the early stages or operating in the informal sector, are not suited to traditional financial instruments, which do not account for their cash flow cycles, risk profiles, or lack of collateral. As a result, existing resources do not translate into financing that is truly accessible.
- An emerging but fragile investment ecosystem: The SME financing ecosystem, particularly in West Africa, remains poorly structured and unevenly developed. Business angel networks are in their early stages, with relatively small investment amounts, a marked aversion to risk, and a preference for debt instruments. The lack of visibility regarding investment successes reinforces this caution, while informal networks and the diaspora continue to play an important role.
- Three systemic barriers are holding back investment flows: Three major constraints have emerged repeatedly: a lack of trust between entrepreneurs and investors, an opaque regulatory and tax environment, and a limited number of investment-ready companies. These challenges are interconnected and reinforce one another, slowing down investment decisions and limiting SMEs’ access to financing.
- ESOs play a strategic intermediary role: ESOs emerge as key players in bridging the gap between entrepreneurs and financiers. Beyond providing support, they help identify credible entrepreneurs, strengthen business capabilities, and facilitate connections with investors. By reducing perceived risks and transaction costs, they play a central role in streamlining investment processes.
- Investment readiness, a critical missing link: A key finding is that many SMEs are not sufficiently prepared to access financing. Investment readiness—including financial management, business structuring, governance, and an understanding of investor expectations—remains inadequate. Without upfront support, even relevant financial mechanisms struggle to reach viable businesses.
- Gender-sensitive financing requires tailored and integrated approaches: The webinar highlighted significant gaps between women and men in terms of access to formal financial systems, due to structural constraints such as a lack of collateral, restrictive social norms, and limited access to networks. Reducing these inequalities requires more than targeted financing. Effective approaches combine tailored financial products with customized support services, including training, mentoring, and networking. Partnerships between ESOs and financial institutions are essential for designing relevant solutions, while impact measurement must go beyond volume to include dimensions of empowerment and decision-making power.
- Financial innovation must be embedded in supportive ecosystems: Financial innovation is all the more effective when it is part of comprehensive support ecosystems and integrated models. Mechanisms such as crowdfunding, impact investing, digital finance, or micro-leasing offer real potential, but their impact remains limited without business readiness, technical support, and trust-building. Conversely, approaches that combine financial instruments, technical assistance, and risk-sharing—often through hybrid models mobilizing public and private resources—enable a better response to the constraints faced by SMEs and more sustainably remove barriers to investment.
- Scaling up requires systemic alignment rather than replication: Scaling up does not rely on duplicating models, but on adapting them to local contexts. It requires alignment among stakeholders, strong institutional partnerships, and a supportive regulatory framework. Approaches must remain flexible to adapt to market realities while maintaining their core principles.
- Data and learning gaps limit effectiveness: A cross-cutting challenge lies in the lack of reliable data and robust monitoring systems, particularly regarding SME outcomes and gender-related impacts. These gaps limit the ability to learn from and adapt interventions. Strengthening monitoring and evaluation systems is therefore essential to improve the effectiveness of actions.
Recommendations from the Speakers
Overall, the webinar highlights the need to shift from fragmented interventions to a systemic approach. This involves strengthening the role of business support services, adapting financial instruments to the realities of businesses, and addressing structural constraints related to trust, regulation, and gender inequalities in a coordinated manner.
- Strengthen support ecosystems around financing: The panelists emphasized that financial mechanisms alone are not enough. It is essential to invest in robust support mechanisms (training, mentoring, SME structuring) to make businesses “bankable” and maximize the impact of financial tools.
- Develop integrated and hybrid models: Approaches combining financing, technical assistance, and risk-sharing should be prioritized. Partnerships between public and private actors and support structures are key to reducing risks and broadening access to financing.
- Adapt financial products to the realities of SMEs, particularly informal ones: Solutions must be flexible, accessible, and tailored to entrepreneurs’ profiles (irregular income, lack of collateral, small business size). This includes developing mechanisms such as micro-leasing, community finance, or digital solutions.
- Addressing gender-related structural constraints: Panelists emphasized the need for gender-sensitive approaches that go beyond access to credit, incorporating training, networking, and the empowerment of women in decision-making.
- Evolving regulatory and policy frameworks: Public policymakers play a key role in creating an environment conducive to financial innovation by adapting regulations to new models (fintech, crowdfunding, hybrid finance) and reducing existing barriers.
- Investing in financial literacy and confidence: A lack of financial knowledge and confidence remains a major obstacle. The panelists emphasized the importance of building entrepreneurs’ capacity to improve their access to and use of financial services.
