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ETC's support for the development of the Beninese textile sector: a whole context


 Groupe NSIA


EUR 34 million


EUR 68 million


The Beninese textile industry is reinventing itself

The news did not go unnoticed in Benin as in the rest of the world. All the media have talked about it: Benin, the leading cotton-producing country in Africa and the 4th country in the world after China, India and the United States, is investing in textile processing.
The beninese cotton is well prized within the textile industry and called “white gold” due to its whiteness, its shining attributes and its silk’s length, which makes it a fiber of exceptional quality.


Cotton from Benin: the end of a paradox

To date, almost all of Benin’s cotton production is transported from the Autonomous Port of Cotonou to the major processing areas of Bangladesh for nearly 60%, but also India or China for the rest. It is then these countries that re-ship their finished products in the form of clothing and other household linens to all the countries of the world, including Benin.

It is an economic, ecological and societal nonsense that is living its last days.


The Beninese government at work to develop its cotton sector

Surfing on the customs assets of the countries of the Franc Zone, on the one hand, on the enthusiasm of Western consumers for products benefiting from the “African cotton” certification in the West, combined with the incredible development lever that offers the location of raw materials processing infrastructures, on the other hand, the government of Benin has chosen to act.

In order to revitalize the cotton sector in Benin by increasing it from a production of 250,000 tons to 766,000 tons in 6 years and making it appear in the world’s top 10, the Beninese government, upstream, favored the supply of seed , worked on setting the purchase price favorable to farmers and worked on the professionalization of the processes.


Glo-Djigbé: the rise of “Made in Benin” textiles

It is by including in its program of action, the emergence from the ground of the Special Economic Zone (SEZ) in Glo-Djigbé that the Beninese government is completing the challenge of a Beninese textile industry like the major sectors textiles of this world.
As part of a public/private partnership concluded between the Republic of Benin and ARISE IIP, the recently built infrastructure covers 1640 hectares. 45 km from Cotonou, the industrial zone dedicated to the processing of agricultural products such as cashew nuts, pineapples, shea nuts, soybeans but also and especially cotton, should, according to estimates, attract investment of at least 1.4 billion dollars on its phase 1. The companies of the whole world which already plan to settle there, suggest a potential of job creation of approximately 12,000 positions.


The ETC guarantee in support of investments in the Beninese textile sector

Benin Textile Corporation (BTC) investment financing

Among the players who have chosen to invest in textiles in the SEZ of Glo-Djigbé, we find Benin Textile Corporation (BTC), which requested an amount of 68 million euros for the construction and installation of a knitting factory. .
Thanks to the financial support of the 2 banks, subsidiaries of the NSIA Group, namely: NSIA Bank Benin and NSIA Bank Côte d’Ivoire, BTC has managed to complete its financing and implement its project.
In order to be covered on their exposures in terms of investment risk division, NSIA Bank Benin and NSIA Bank Côte d’Ivoire benefited from the ETC risk mitigation instrument: the Concentration Risk Bond up to 34 million euros.
In accordance with the prudential requirements of Basel, this coverage enabled the financiers to maintain their maximum ratio of concentration of large risks and to support BTC in its project with complete peace of mind.


The 5 reasons that motivated NSIA Bank to choose ETC for its risk coverage?

Reason n°1: an already proven partnership

The relationship between ETC and NSIA Bank is progressing and partnerships are multiplying.
Indeed, on March 24, 2022, ETC issued a first Concentration Risk Bond of 7.6 million euros in favor of NSIA Bank Benin. This coverage came as a counter-guarantee for the joint and several surety that it had granted for the benefit of its “sister” bank NSIA Bank Côte d’Ivoire. The ETC instrument has enabled NSIA Bank subsidiaries to mitigate the risks relating to portfolio exposures for the benefit of large companies and SMEs.


Reason 2: ETC’s special expertise

ETC-Export Trading Cooperation is a guarantee institution of Italian origin created in 2012, specializing in the technical and financial management of international trade and investment, particularly in sub-Saharan Africa.


Reason 3: ETC’s public rating

ETC is rated A3- (“low” risk category 2) with the European Securities and Markets Authority (ESMA) by an External Credit Assessment Agency (ECAI). To this end, according to the correspondence table, the credit risk weighting applicable to ETC in Euro is 50% (see official rating published on the ESMA website).


Reason 4: ETC’s membership of the SWIFT network

ETC “Export Trading Cooperation” is an active member of SWIFT (Society for Worldwide Interbank Financial Telecommunication) under category 2 called NOSU (Non Supervised Entity active in financial industry), with its BIC (Business Identifier Code) ETCGIT2T.
This gives it the opportunity to provide assistance to FIs (Financial Institutions) and DFIs (Development Financial Institutions) according to the particularly advantageous Swift criteria.


Reason 5: ETC’s signature commitment

ETC’s hedging instrument is the stand-alone guarantee, which is equivalent to a direct, irrevocable and unconditional claim.


Beyond financial considerations, “responsible growth”: a value dear to ETC.

By providing NSIA Bank with the facility that enabled BTC to invest in its knitting plant, ETC reaffirms its values of “responsible growth”, and demonstrates its commitment to the 17 United Nations goals within the framework of the sustainable development by 2030.
Indeed, this project is for ETC the opportunity to contribute significantly to the Sustainable Development Goals SDGs by thus certifying the compliance of NSIA Bank in the management of financial and legal risks in environmental and social impact investments.


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Benin | ETC, provides its Concentration Risk Bond to NSIA Bank to finance the investments of Benin Textile Corporation (BTC)

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