Credit Solutions Available from Cape Verdean Banks to Support Entrepreneurs and Small Businesses

Access to credit is one of the fundamental pillars for the growth and sustainability of enterprises in Cape Verde, especially for small businesses and start-ups. The Cape Verdean financial system offers a variety of financing solutions tailored to the needs of entrepreneurs and micro, small and medium-sized enterprises (MSMEs). These options range from government programmes to private initiatives, with specific conditions aimed at fostering innovation, job creation and economic development.

Among the main initiatives is the Access to Finance Project for Micro Small and Medium EnterprisesThe programme is funded by the World Bank in partnership with the Cape Verdean government. This programme includes components such as partial credit guarantee funds, technical assistance and improved credit information systems, with the aim of facilitating access to finance and boosting private investment. More information can be found at UGPE's official website.

In addition, commercial banks such as Banco Comercial do Atlântico (BCA) and Cape Verdean Business Bank (BCN)With a range of financial products, including short- and long-term loans, credit lines and investment finance. Conditions vary according to the company's risk profile, with interest rates ranging from 5% to 11%. For more details on the NCB's products, visit the bank's official website..

Finally, initiatives such as Securities Guarantees Registration PlatformThis initiative, launched by the Government of Cape Verde, allows movable property to be used as collateral to obtain credit, promoting the financial inclusion of small businesses and families. Details of this initiative can be found at PT50 Newspaper.

These credit solutions, combined with training programmes and tax incentives, represent significant opportunities for Cape Verdean entrepreneurs to turn ideas into successful businesses.

Credit Programmes Available for Entrepreneurs and Small Businesses in Cape Verde

Government Incentives for Startups and SMEs

The Cape Verdean government has implemented specific programmes to support entrepreneurs and small businesses, with a focus on innovation and sustainability. One of the main programmes is Entrepreneurship and Innovation Support Programme (PAEI)This programme aims to reduce financial risks for start-ups and small businesses through subsidies and credit guarantees. This programme is managed by Institute for Business Support and Promotion (Proempresa), which collaborates with local financial institutions to facilitate access to credit.

Conditions include:

• Credit guaranteesThe government covers part of the risk associated with financing.
• Low interest ratesThey range from 5% to 10%, depending on the company profile.
• EligibilityInnovative companies, start-ups and SMEs with projects aligned with priority sectors such as technology, sustainable tourism and renewable energies.

To apply, entrepreneurs must submit a detailed business plan, financial statements and an up-to-date commercial register. More information can be found on the official Proempresa.

Youth and Women's Bank (BJM)

O Youth and Women's Bank (BJM) is an innovative initiative launched by the Cape Verdean government to support young people and women entrepreneurs. This digital bank offers eight lines of credit specifically for start-ups and SMEs, with a focus on sectors such as energy transition, creative industries and digitalisation.

The main conditions include:

• Target audienceYoung people aged between 18 and 35 and women aged 18 and over.
• Specific credit lines: Support for energy transition, digitalisation and creative industries projects.
• Process 100% digitalFrom application to credit approval, the entire process is carried out online, guaranteeing transparency and speed.

To apply, you need to register on the bank's digital platform, submit a business plan and personal and business documents. More details are available on the Government of Cape Verde.

Traditional bank loans

Commercial banks in Cape Verde, such as Cape Verdean Business Bank (BCN) and Cape Verde Savings Bank, offer various credit solutions for small businesses. These institutions offer financial products adapted to the needs of SMEs, such as the Investment Credit and CREDIMAR.

Cape Verdean Business Bank (BCN)

• Investment CreditCredit line for companies wishing to expand or modernise operations.
• CREDIMAR: Specific funding for projects related to maritime activities.
• Bank guaranteesInstruments that strengthen companies' investment capacity.

Those interested must submit documents such as financial statements, commercial registration and a business plan. More information can be found on the NCB.

Cape Verde Savings Bank

• Financing amountUp to 70% of the total value of the project.
• Flexibility in reimbursementAdjusted to the investment recovery period.
• Competitive interest ratesThey depend on the company's risk profile.

Requirements include sending a formal application, pro forma invoice, financial statements and other legal documents. See more details on the Cape Verde Savings Bank.

Investment from the Cape Verdean Diaspora

The Cape Verdean diaspora plays a crucial role in financing small businesses in the country. O Cape Verdean Diaspora Investment Programme (PIDC) was created to channel remittances and direct investments from Cape Verdeans living abroad.

Conditions include:

• Tax incentives: Tax cuts for investments in priority sectors.
• Technical support: Assistance in structuring and implementing projects.
• Eligible sectorsTourism, agriculture and renewable energies.

Interested entrepreneurs should contact Proempresa or the Ministry of Communities for detailed information on the requirements and benefits. More information is available at official website of the Government of Cape Verde.

Venture Capital and Crowdfunding

For startups and innovative businesses, venture capital and crowdfunding are emerging as viable financing alternatives in Cape Verde. These options are especially useful for companies that face difficulties in obtaining traditional bank credit.

Venture Capital

• Private investors: They offer financing in exchange for a shareholding.
• Target sectorsTechnology, renewable energies and creative industries.
• BenefitsAccess to capital without the need for traditional guarantees.

Crowdfunding

• Digital platformsThey allow entrepreneurs to raise funds directly from individual investors.
• FlexibilityIdeal for smaller-scale projects or those with a strong community appeal.

Entrepreneurs can explore international or regional platforms to launch crowdfunding campaigns. Proempresa also offers support for structuring effective campaigns.

Conditions and Requirements for Access to Financing

General Eligibility Criteria

To access the various credit solutions available in Cape Verde, entrepreneurs and small businesses must meet general criteria that vary depending on the financial institution and the specific programme. Generally speaking, the requirements include:

• Formal Business RegistrationCompanies must be formally registered and present legal documentation, such as the commercial register and the tax identification number (NIF). (BAI Bank Cape Verde)
• Business PlanIt is essential to present a detailed business plan that demonstrates the viability of the project and its ability to generate revenue.
• Financial StatementsCompanies already in operation must provide recent financial reports, such as balance sheets and income statements.
• Guarantees and GuarantorsDepending on the programme, real guarantees, guarantors or the domiciliation of income in specific bank accounts may be required. (Cape Verde Savings Bank)

Specific requirements per programme

1. Youth and Women's Bank (BJM)

The Youth and Women's Bank (BJM) offers specific credit lines for young entrepreneurs (18-35 years old) and women aged 18 and over. Conditions include:

• Age and Beneficiary ProfileYoung or female entrepreneurs, including university students and graduates of technical courses.
• Sector Focus: Creative industries, energy transition, digitalisation and businesses led by Cape Verdean emigrants.
• Required documentationPersonal identification, proof of economic activity and, in some cases, certification of professional training. (Forbes Lusophone Africa)

2. StartUp Youth Programme

This government programme aims to support start-ups led by young people, with differentiated conditions:

• Available AmountUp to 94,943,925 CVE were allocated to this programme between 2018 and 2019.
• Competitive Interest RateAverage of 7.26%, with conditions adjustable to the project profile.
• Bank GuaranteesPossibility of access to specific guarantees to facilitate credit. (Government of Cape Verde)

3. Microcredit from Caixa Económica de Cabo Verde

Microcredit is a solution for micro-entrepreneurs and people on low incomes, with simplified conditions:

• Maximum Amount: Small amounts adjusted to business needs.
• Alternative GuaranteesFor group loans, members act as mutual guarantors, eliminating the need for traditional guarantors.
• Technical SupportIncludes financial education and assistance with business management. (Cape Verde Savings Bank)

Credit Application Process

1. Order submission

Interested parties must submit a formal application to their chosen financial institution. The process usually involves:

• Delivery of documentationIncludes personal identification, business registration, business plan and, where applicable, financial statements.
• Prior ConsultationIt is advisable to schedule a meeting with the bank manager to clarify doubts and align expectations. (BAI Bank Cape Verde)

2. Order evaluation

After submission, the bank or financial institution carries out a detailed analysis, taking into account:

• Project viability: Evaluation of the business plan and the potential return on investment.
• Credit historyVerification of the applicant's debt capacity and financial history.
• Guarantees offered: Analysis of the guarantees presented, such as real estate or guarantors.

3. Decision and contract

Once approved, the loan is formalised by signing a contract, which specifies:

• Amount and TermAmount granted and repayment period, usually up to 36 months for small businesses.
• Interest RatesDefined on the basis of the risk profile and market conditions.
• Payment termsThey include the frequency of instalments and possible penalties for delay. (Cape Verdean Business Bank)

Additional Benefits and Complementary Support

In addition to credit, many institutions offer additional benefits to support entrepreneurs:

• Financial Education: Financial and business management training programmes.
• Technical support: Consultancy to optimise the use of financial resources and maximise the return on investment.
• Access to Business NetworksConnection with investors and strategic partners, facilitating business expansion. (Cape Verde Savings Bank)

This report presents new information that complements existing content, focusing on the specific eligibility criteria and the detailed credit application process, without repeating information that has already been covered.

Process for Applying for Credit and Available Support

1. credit application steps

Preparing the necessary documentation

To start the credit application process, entrepreneurs must gather the documents required by the financial institution. These include:

• Updated Commercial CertificateDocument proving the formal registration of the company.
• Detailed Business PlanIt should include financial projections, market strategies and project viability.
• Recent Financial StatementsReports such as balance sheets and profit and loss accounts for companies already in operation.
• Personal and Tax IdentificationPhotocopies of identity card (BI) or national identification card (CNI) and tax identification number (NIF).

These requirements are common in programmes such as Youth and Women's Bank and Pro Company.

Application Submission

Once the documentation has been prepared, the next step is to formally submit the application. This process can be carried out in person at bank branches or digitally, depending on the institution. For example, the Youth and Women's Bank offers a digital 100% system, allowing entrepreneurs to follow every stage of the application online. (Directorate-General for Employment).

Order evaluation

The application is analysed on the basis of criteria such as the viability of the project, the applicant's credit history and the guarantees offered. This process is essential for determining the risk associated with the financing. (Cape Verdean Business Bank).

2. Complementary Support Programmes

Technical Consultancy and Training

In addition to credit, many programmes offer technical support to strengthen entrepreneurs' skills. For example Pro Company promotes training in financial and business management, while the Youth and Women's Bank includes professional training initiatives.

State Guarantees

To reduce the risks associated with credit, some programmes rely on state guarantees. O Stimula Empreenda+, promoted by Pro Empresa, covers 100% of guarantees for young people and women entrepreneurs, facilitating access to finance. (Pro Company).

3. Financing conditions

Competitive Interest Rates

Interest rates vary according to the programme and the applicant's profile. For example:

• Youth and Women's Bank: Rates adjusted with state bonuses.
• Pro Empresa - Stimula Empreenda+Rate of 5.5%, below the market average. (Pro Company).

Deadlines and Refund Modalities

The repayment periods are adapted to the needs of the entrepreneurs. In the case of the Youth and Women's Bank, the term can be up to 60 months, with a six-month grace period. (Directorate-General for Employment).

4. Access to bank finance

Specific products for SMEs

Commercial banks in Cape Verde, such as Banco Comercial do Atlântico (BCA) and Cape Verdean Business Bank (BCN), offer specific financial products for small and medium-sized enterprises. These include:

• Investment CreditFor expanding or modernising operations.
• Escrow Account: For treasury management.
• Microcredit: Reduced amounts with flexible conditions for micro-enterprises.

Documentation and requirements

Banks require documents such as an economic feasibility study, commercial registration and financial statements. Approval depends on the applicant's risk profile and repayment capacity. (Cape Verdean Business Bank).

5. Digital and Innovative Initiatives

Youth and Women's Bank

This digital bank is designed to simplify access to credit, reducing bureaucracy and speeding up the decision-making process. The entire procedure, from application to approval, is carried out online, ensuring greater transparency and efficiency. (Government of Cape Verde).

Crowdfunding and Venture Capital

In addition to traditional banks, entrepreneurs can use crowdfunding platforms to raise funds directly from investors. Pro Empresa offers technical support to structure effective campaigns. (Pro Company).

This report provides additional information to that already available, focussing on specific details of the application process and the financing conditions available, without repeating content previously covered.

Conclusion

The Cape Verdean financial system offers a wide range of credit solutions to support entrepreneurs and small businesses, with an emphasis on government initiatives, commercial banks and innovative alternatives such as crowdfunding and venture capital. Among the most relevant programmes are Entrepreneurship and Innovation Support Programme (PAEI)managed by Proempresaprovides subsidies and credit guarantees for start-ups and SMEs in strategic sectors, while the Youth and Women's Bank (BJM)This digital platform facilitates access to finance for young people and women entrepreneurs, with simplified processes and a focus on areas such as digitalisation and the energy transition. In addition, commercial banks such as Cape Verdean Business Bank (BCN) and Cape Verde Savings BankThese offer financial products adapted to the needs of SMEs, including micro-credits and specific credit lines.

The main requirements for access to credit include submitting a detailed business plan, up-to-date commercial register and financial statements, which vary depending on the programme or institution. In addition, initiatives such as Cape Verdean Diaspora Investment Programme (PIDC) and the technical support offered by Proempresa strengthen the financing ecosystem, promoting sustainability and economic growth. Digitalisation, exemplified by the Youth and Women's Bank, and the use of crowdfunding platforms are emerging as promising trends, expanding access to capital in an agile and inclusive way.

To maximise the impact of these initiatives, it is essential that entrepreneurs are well informed about the eligibility criteria and funding conditions, consulting the websites of the institutions mentioned, such as the Government of Cape Verdeand taking advantage of the technical consultancy services available. Strengthening financial education and creating support networks continue to be crucial steps in guaranteeing the success of small businesses and fostering entrepreneurship in the country.