A kick-off meeting for the “Emergency Fund for Micro, Small and Medium Enterprises (MSMEs) in Togo” project took place on Friday, November 13, in Lomé. It is an initiative of the United Nations Development Program (UNDP), in partnership with the United Nations Capital Development Fund (UNCDF). It will support around fifty formal and informal MSMEs, to overcome the effects of the Covid-19 crisis, and to prepare for the opportunities of the post-Covid period.

The health crisis, caused by COVID-19, has immediate repercussions on the Togolese economy, with a slowdown in activities, particularly for the private sector, which is resolutely committed to supporting the implementation of the National Development Plan (PND 2018-2022). The Togolese private sector today finds itself in a fragile environment due to this health crisis. This jeopardizes all the gains made thanks to the reforms undertaken in recent years. Many businesses, unable to operate remotely, face the daunting prospect of collapsing and throwing thousands out of work.

According to a recent study conducted in Togo, more than 92% of companies recorded a decline between February and March 2020, due to this health crisis. In descending order, companies in the service sector recorded the largest drop in turnover (93.5%) followed by those in trade (92.6%), industry, mining and construction. (92%), and agriculture (87.2%). Indeed, more than 34% of private sector companies have seen their turnover drop by more than 75%.

It is in this context that the UNDP and its partner, the UNCDF, initiated the project “Emergency Aid Fund for Micro, Small and Medium Enterprises (MSME)”. Worth around 350 million FCFA, this six-month project aims to support 50 formal and informal MSMEs to overcome the effects of COVID-19. More specifically, it will allow these companies to develop entrepreneurial and managerial skills, but also to receive financial assistance (in the form of grants and loans) to mitigate the impact of COVID-19. There is also talk of digitizing their commercial transactions, through the provision of a digital E-recording application. The initiative offers them the opportunity to collect data on the financial health of their companies, to support funding requests.

The project therefore covers three components to be implemented with national partners. The first part, "Leveraging digital solutions", covers the implementation of innovative digital solutions, to help companies streamline their existing distribution channels, optimize their inventory management, create online distribution channels and use digital payments. The partner for this component is the company CAGECF. The second component, "Strengthening resilience and access to financing", aims to strengthen the resilience of SMEs in the face of COVID-19. UNDP and UNCDF will work with Société Générale de Micro et Méso Finance (SOGEMEF), a microfinance institution specializing in the development and implementation of a financing program for SMEs affected by the crisis. And finally, the third component concerns “Capacity building of support structures for MSMEs”. Support will take the form of capacity building in business model development, training in financial education, digital and entrepreneurial skills, and fundraising. The partner on this component is the Association for the Promotion of Excellence (PROGDEV).

In launching this project, the Deputy Resident Representative of UNDP, Mr. Mactar Fall, noted that UNDP, within the framework of its mandate, had to do something for MSMEs, in this context of crisis. UNDP, he said, responded to this crisis in five areas; health, socio-economic resilience, community support and social protection, digital innovation and finally support for recovery. And it is in this last part that the present project is located. It is a pilot project, but innovative, in the sense that everything is taken into account such as financing, training and the digital component, since the health situation requires the use of digital.

The wish is that the companies identified can recover and become strong to contribute to the development of the country.

The UNCDF West Africa Regional Coordinator, Ms. Sabine Mensah, explained that her structure specializes in everything related to inclusive finance and support for local development.