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SOGEFOM: A guarantee fund that facilitates MSME access to bank loans
The SOGEFOM guarantee fund for the French Overseas Territories facilitates access for micro-, small, and medium-sized enterprises (MSMEs) to bank loans. Agence Française de Développement (AFD) is the main shareholder (58.7%) alongside the banks of the French local authorities in the Pacific region (New Caledonia, Wallis and Futuna, and French Polynesia). AFD also handles the operational, administrative, and financial management for the guarantee fund.
Objectives
SOGEFOM provides a partial guarantee when required by the shareholder banks granting loans to MSMEs. The guarantee can cover short-term cash loans as well as medium- and long-term investment loans.
In principle, the duration is equal to the duration of the guaranteed loan, with a limit of up to 16 years for investment loans. SOGEFOM generally covers between 50% and 70% of the loan amount, and up to 80% for the creation of a new micro-enterprise.
SOGEFOM supports the creation, development/restructuring, and transfer of a business with short-term products (e.g., overdrafts, seasonal loans, bridge loans) and guarantees on investment loans or business restructuring loans.
The French government plays a crucial role in the mechanism by allocating funds that, by leveraging multiplier coefficients, can cover the potential commitment from SOGEFOM.
Determining eligibility
SOGEFOM facilitates access to loans for private companies:
- with fewer than 250 employees,
- with under €50 million in turnover,
- operating in a sector other than financial intermediation or real estate development and rentals.
The guarantee can cover the following types of lending arrangements:
- short-term loans (cash, seasonal, bridge),
- medium- and long-term loans,
- leasing,
- loans for business restructuring.
To find out about our solutions tailored to your needs
Type of support: The amount varies between 50% and 70% of the loan amount, and up to 80% for the creation of a new micro-enterprise.
Duration: In principle, the duration is equal to the duration of the guaranteed loan, with a limit of up to 16 years for investment loans.
Ineligible entities
The following are not eligible:
- public-sector companies (where the majority of capital is directly or indirectly held by public entities),
- enterprises engaged in financial intermediation,
- real estate development or rental firms (except sociétés civiles immobilières financing property rented to a partner company),
- borrowers, guarantors, or shareholders listed under previously defaulted guarantees,
- companies for which SOGEFOM has previously activated a guarantee due to default, unless the full amount has been reimbursed.
