While the securitization market has been slow to develop in Africa, the increase in the number of operations in the West African Economic and Monetary Union (WAEMU) zone highlights its growth potential.

Securitization is a financial technique that consists in transferring financial assets such as claims to investors by transforming them into financial securities issued on the capital market via a dedicated financial vehicle (called a joint securitization fund in the WAEMU zone). This allows the selling company to generate liquidity or to optimize the size and structure of its balance sheet. Emerging around 60 years ago in the United States, securitization gradually spread around the world as a genuine financing or financial investment tool before slowing down during the subprime crisis, during which this instrument was at the forefront. Today, the securitization market has regained its global dynamism thanks to better supervision of this technique.

As far as the UMEOA zone is concerned, since 2014, a total of 12 securitisation transactions have been carried out for an amount of 1,065.8 billion CFA francs, six of which took place in the last two years alone, according to the Financial Markets Authority of the West African Monetary Union (AMF-UMOA), formerly the CREPMU F. This confirms not only that the market has adopted this financing technique, but that securitization also has significant potential in the WAEMU zone and in Africa. However, this potential is very far from being fully exploited, in particular because of the regulatory framework that needs to be improved and (ii) a lack of knowledge of this technique by economic actors in the area.

Based on these findings, Deloitte and Asafo & Co. In partnership with the 4 authorized securitization mutual fund management companies in the UMOA zone (Africa Link Capital Securitisation, BOAD Securitisation, Joseph Securitisation and KF Securitisation), are co-organizing the first African Securitisation Forum to be held on 30 November in Lomé, the day after the Africa Financial Industry Summit (AFIS). This first edition, sponsored by the World Bank Group (IFC), BOAD, BRVM and GCR Ratings, will mainly be devoted to the specific securitization market of countries in the WAEMU zone, whose regulatory framework is celebrating its 12th anniversary this year.

A unique platform for exchanges, the forum aims to bring together all actors in the ecosystem and create a real permanent framework to promote securitization as an alternative and complementary financing instrument for the economy, while capturing technical and financial innovations. The bringing together of specialists in this segment will also create a collective force in order to anticipate and influence future regulatory orientations and make them converge towards international standards.

The forum is aimed at all players in the securitization segment, namely mutual fund management companies for debt securitization (FCTC), regulators, stock exchange companies, and development finance institutions (DFIs), as well as all originators, beneficiaries and intermediaries operatives, banks, businesses and insurance companies.

We invite all players in the securitization segment to come and discuss with us at the African Securitization Forum on November 30 in Lomé (Togo). This will be an opportunity to take stock of securitization and to collectively look to the future.

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Pascal Agboyibor — Managing Partner | Asafo & Co

Aristide Ouattara — Deloitte Africa Partner