Driving entrepreneurship for the underserved in Senegal

Abler Nordic portfolio company Baobab Senegal works to help underserved small entrepreneurs and SMEs tap into their full entrepreneurial potential, regardless of financial status


The Challenge

Senegal has experienced great strides in financial inclusion, with the proportion of adults with access to formal financial services increasing from 15% in 2014 to 56% in 2021 (Global Findex, 2021). Much of this growth is driven by digital payments and has been strengthened by the country’s adoption of a National Financial Inclusion Strategy (NFIS) in early 2022. Despite this progress, 44% of adults in Senegal still do not have access to appropriate financial services such as credit, savings, and insurance that can help them generate or increase their income and build resilience to tide them through tough times.

Tapping into potential

Baobab Senegal, a deposit-taking Microfinance Institution (MFI) founded in 2007, works to provide straightforward and accessible services that help underserved clients tap into their full entrepreneurial potential, regardless of financial status. Baobab Senegal is a subsidiary of Baobab Group, a financial services group with operations in eight countries in Africa and one province of China.

Products include loans, savings and insurance, and target customers are both very small entrepreneurs who need micro-credit (less than €3,000) repayable in the short term, and SMEs in need of bigger loans (up to €200,000) and longer maturities to support more substantial investments. Working capital loans are generally used to increase inventory for trade and services or to acquire the raw materials for production, while investment loans typically are for remodelling stores, buying equipment for trade and services or acquiring manufacturing machinery for production.

Baobab Senegal also offers insurance, providing a safety net for borrowers and their families in the event of death or disability, and a savings product allowing customers to save little-by-little for important expenses and have a safe place to store their earnings.

Our active ownership approach

Abler Nordic first invested equity in Baobab Senegal in 2012, supporting the Company through a strong growth phase. Since 2012, Baobab Senegal’s Gross Loan Portfolio has almost quintupled, and they have more than doubled the number of borrowers and depositors. As an active owner, Abler Nordic sits on the board of Baobab Senegal and our Technical Assistance Facility has worked closely with the company to implement several projects, including developing branchless transactions and mobile banking, to facilitate outreach to clients in remote areas and reduce operational costs.

Baobab’s network covers almost the whole country, with 59 branches— and now 439 banking agents utilising branchless transactions. Branch staff hire and train the agents, typically motivated young entrepreneurs, who are provided with Baobab branded kiosks in semi-rural areas where there is potential for growth. Baobab support them in the first 6 months of their agent business, with working capital funding, a tablet, and a basic minimum salary.

At Baobab Banking Agents, customers can make deposits and withdrawals, open accounts, apply for loans, check their account balance, pay bills, obtain nano-credits and transfer money. In addition, the Abler Nordic TA facility has also supported projects to help the Company obtain a Social Rating and a project to enhance operations and outreach.

My Story - Matar, Shoe Merchant

Baobab Senegal customer since 2016

For more than eight years, Matar has been selling shoes at the Rufisque central market in Senegal. Matar began his business with a personal investment of only 350,000 CFA Francs (€539 Euros), which allowed him to buy his very first stock of goods.In 2016, Matar learned about Baobab through a friend: “I discovered Baobab thanks to a friend who had obtained a loan under very good terms.” Matar also received a positive response when he applied for his first loan, and he was able to finance his stock of goods to satisfy his increasingly demanding customers.

In just a few months, Matar made a name for himself not only in Rufisque market but also in his business sector. “Since I began working with Baobab, my business has taken a positive turn,” he explains proudly. In 2020, the pandemic created business difficulties for Matar with a series of curfew measures that considerably reduced his sales. Given the context, Matar was offered a deferral of his repayments, but he decided to continue paying off his loans. He is thankful for the initiative and says, “Baobab stands out from other microfinance institutions due to its speed, flexibility and above all its unwavering support.”

Today, business has picked up again. Matar’s goal is to open a second store and to expand to also sell clothes and accessories. He plans to travel to China to meet his suppliers and is even thinking about launching into the wholesale business. For his future projects, he is again counting on Baobab’s support: “I’m grateful to the Baobab teams for their support and the confidence they have always had in my projects. I hope to continue working with them for as long as possible!

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Abler Nordic was established in 2008 in Oslo, Norway as a partnership between the public sector and private investors. Abler Nordic invests in institutions building financial inclusion in Africa and Asia.
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