Tenke Fungurume Mining, USAID and TMB launch first DCA in the DRC
01.06.2010: Trust Merchant Bank (TMB) has entered into a partnership with USAID and Tenke Fungurume Mining (TFM) to launch a programme aimed at nurturing and developing new small businesses in the Katanga province by enhancing their access to financing.
USAID’s Development Credit Authority (DCA) is a risk-sharing partnership which allows private financial institutions such as TMB in developing countries like the DRC, to lend to sectors and businesses which are currently underserved. TFM has acted as a significant financial contributor to the DCA programme together with TMB and USAID.
To help TMB extend loans to new and developing businesses that up until now have been underserved, the US Treasury, via a program with USAID, extends credit guarantees of up to 50% to small and micro enterprises.
The $ 5 million, seven year programme allows entrepreneurs to invest and expand their business operations, hence creating new jobs and contributing to the development of the community and the country.
The programme particularly fosters the development of small businesses as suppliers to the mining sector in Katanga, providing new employment opportunities for artisanal miners and unemployed. As part of the programme, Tenke Fungurume Mining directly and through partners supports local business development in the Lubudi Territoire by providing technical support and training programmes for eligible enterprises. Notably, there is a focus on business development training and financial planning workshops, with TMB and TFM working together to support the latter.
The philosophy behind the DCA is that risk-sharing partnerships allow financial institutions like TMB to lend to creditworthy borrowers in new sectors or with new profiles. This permits TMB to explore new clients and markets which are currently underserved. In the future, given a positive experience, the bank would be able to continue lending to this market without credit guarantees, in essence providing a market demonstration effect that opens up new sectors to the financial services.