First Technical Assistance to Five Financial Institutions from Somalia

organization through sales and marketing excellence.

First Technical Assistance to Five Financial Institutions from Somalia

The sales training was followed by a 3-day credit risk management course, which was held by the regional team leader Guillermo Bosse and covered the following modules: introduction to credit risk; appraisal of SME enterprises; loan underwriting standards; preparatory work for site visits & loan negotiation; high quality protocols, report preparation & presentation to credit committees; financial analysis of MSME borrowers; how to write a credit report; and monitoring of SME clients and NPL management.

The aim of this crucial training was therefore to improve the knowledge and skills of credit analysts to be able to undertake an in-depth analysis of loan appraisals, in particular the financial statements of MSME borrowers, identify potential risks, especially credit and operational risks, and subsequently make objective decisions regarding the creditworthiness of MSME borrowers.

Somalia has come a long way. After 25 years of conflict, cycles of drought and flooding as well as famine, Somalia is showing signs of increased security and stabilisation and the start of economic recovery. The EU constitutes the country’s largest donor, in terms of political engagement as well as financial and technical support. In the period from 2014-2020, Somalia will have received EUR 286M from the European Development Fund.

Private Sector Programme Manager Benoit Larielle represented the Delegation of the European Union to the Federal Republic of Somalia when AFC opened its one-week training for financial institutions from Somalia. Selected staff from the Somali Bankers Association, Dahabshil Bank, Premier Bank, Salaambank, IBS Bank and Amal Bank were trained in Sales & Marketing and Credit Risk Management in the context of the Technical Assistance Programme to Various EIB Financial Sector Operations in East and Central Africa.

The CEO of the Somali Bankers Association and the Somali banks’ representatives/ trainees repeatedly expressed their gratitude for the support of the EU and the EIB. They also used the presence of the EU Delegate to seek more information regarding mutual benefits of a future partnership and stressed how important the investment in their country was after years of civil war.

As previously agreed with these banks, the 2-day sales training conducted by the short-term expert Paul Kitemu was aimed at equipping the 25 participants (middle level managers and heads of departments) with effective sales and marketing skills that are vital in empowering the banks compete effectively, acquire and retain customers thus bringing growth to the 1

further technical assistance was planned for Somalia, the EIB will keep coordinating with the EU. AFC is pleased to have been facilitating this dialogue and first TA training for Somali banks, alongside the EIB and the EU, and envisages this first week of March 2020 to mark the start of a mutually beneficial partnership between the EIB and Somalia.

Mr Larielle explained that via its partner institutions the EU was encouraging investments in Somalia’s infrastructure, human resilience and human capital accompanied by private sector investments, support of micro entrepreneurs and SMEs as well as enhancement of commercial banks’ capacities. Somalia’s economy is highly informal, but its entrepreneurial private sector is one of the country’s main assets. Therefore, the EU is designing a programme to support micro businesses. Mr Larielle informed about the EU’s resilience programmes, working with incubators and village savings groups, focusing on trainings for small producers. The EU is also planning to further support micro entrepreneurs and helping many of the MSMEs to be more profitable.

“There is potential for them to enter the formal economy and become clients of the commercial banks like yours”, he said. To encourage investment banks to further engage in the region, the EU collects data and promotes dialogue engagement, meaning it informs about requirements, obstacles and measures taken to ease investment in the region. Mr Larielle further emphasised that the EU is open for suggestions from the banks and information “from the ground”, to better understand the needs of Somalia’s economy and to be able to provide relevant service in the future, especially supporting women and the private sector.

For further information please contact: Guillermo.Bosse@afci.de or Friederike.Graupner@afci.de

Catherine Collin and Myriam Djari from EIB’s Regional Representation for East Africa were present on the last day and expressed how much they welcomed the seminar. While for now no

Reference: Delegation of the European Union to Somalia. https://eeas.europa.eu/delegations/somalia_en

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