Concept note: Strengthening and adapting portfolio management for banks in West & Central Africa in the context of the crisis

1.Introduction and background

Making Finance Work For Africa (MFW4A) and the IPC, Horus and IECD Consortium, within the context of the European Investment Bank (EIB) TA Financial sector programme for West and Central Africa will host a series of four (4) webinars for banks and microfinance institutions of these two (2) subregions. The first webinar will cover the strengthening of loan portfolio and asset management by banks during times of crisis, including distressed assets and non-performing loans.

The appearance of Covid-19 has caused a shock to the global economy and the uncertainty around the pathway to recovery remains very high. Banks have been in crisis management mode for the past six months and are now having to deal with new paradigms in the aftermath. Ensuring operational continuity and the continued provision of financial services has been the main task of FIs. Many had to take damage control measures to safeguard their financial performance, maintain client confidence, and mitigate client vulnerabilities.

Despite the introduction of policy measures to support the financial sector, in many markets, the stability of the financial sector is threatened by the increase of NPLs, a negative economic outlook and the vulnerability of SMEs that were hit by the crisis. Thus, loan portfolios are still under stress and banks need to adopt new measures of doing business with clients that are more vulnerable, identify opportunities among the sectors that have been less affected by the crisis and adapt their services to the new context.

EIB’s mission clearly supports motions to:

• Ensure the provision of financial services in line with the regulatory requirements and maintaining asset quality and protecting customer deposits, and
• Help partner banks to continue business operations on a credit worthy basis, proactively managing present and future NPLs and ensuring the safety of customer deposits.

In this context, banks and actors from the private sector are invited to discuss lessons learned from the crisis with regards to proactive loan portfolio management, including sharing knowledge and tools that open the path to a set of practical solutions. Panellists will also debate immediate responses and new paths to further strengthen the resilience of the banking sector in West and Central Africa with a focus on credit and portfolio management.

2.Expected outcomes

The expected outcomes of this webinar session are as follows:

• Create a better understanding of credit performance challenges faced by the West and Central African banks and share experience on how to adapt credit operations to the current environment post-crisis
• Share best practices and lesson learned by banks with regards to portfolio management
• How to deal with distressed assets and NPL management
• Provide a platform to discussion actions/measures to manage loan portfolio and NPL under the new normal

At the end of the webinar, key takeaways will be summarized in a post-event report and shared with participants and other stakeholders within the African financial ecosystem. A digital version will also be posted on MFW4A portal for public dissemination.

3.Event format and audience

The webinar will last about 75 minutes and held in French. It will combine a presentation followed by a panel discussion and Q&A session. The target audience is essentially credit analysts from banks and development finance institutions operating in West & Central Africa.

4.Tentative speakers

Moderator: Bernard Koissy, IPC consultant & Hugues Kamewe, MFW4A

Tentative panellists:

• Martin Heimes, Head Financial Sector Debt financing
• Victor Prévot, SME finance consultant, IPC 
• Célestin Mukeba, CEO, Equity Bank DRC
• Olivier Edelman, Head of Microfinance Unit, EIB

5.Other planned webinars

• 21st January 2021: Business recovery and the new normal (post-crisis)
• 28th January 2021: The importance of digitalization in times of crisis
• 04th February: Gender finance as opportunity in crisis times

6.Contact

MFW4A: Hugues Kamewe

Email: h.kamewe-tsafack@afdb.org

IPC GmbH: Edwige Takassi

Email: eibtawestafrica@ipcgmbh.com