Financing a business in Madagascar: public schemes and bank credit
A Malagasy entrepreneur can fund a project through licensed banks and MFIs, through leasing or through the public Fandroso programme launched in July 2026 with 200 billion ariary, provided the business is registered, the plan is solid and the collateral fits.
Setting up and formalising your business
The Economic Development Board of Madagascar, or EDBM, handles company formation formalities in Antananarivo. The entrepreneur obtains a tax identification number, a statistical card and a trade register entry, three items every bank asks for.
Fandroso, the programme launched in 2026
Announced in July 2026 at Ambohitsorohitra palace, Fandroso has 200 billion ariary at its disposal. It offers reduced-rate loans of up to 60 million ariary, together with training and technical mentoring for young project founders.
The Tsiry and Tafita strands
The Tsiry strand is aimed at young people launching a start-up or a first business. The Tafita strand supports existing small and medium-sized firms that want to restructure or grow, provided the file is judged viable and sustainable.
The legacy of the Fihariana programme
Created in 2019, Fihariana mobilised about 185 billion ariary and supported tens of thousands of project founders across the 115 districts. Its loans, distributed with partner banks, carried preferential rates of between 9 and 11%.
What Malagasy banks look at
BNI Madagascar, BOA-Madagascar, BFV, BMOI and MCB Madagascar examine financial statements, account flows and collateral. A business that keeps no proper books or has no banking history behind it rarely manages to obtain an investment loan.
Gargotes and workshops: starting with microfinance
A gargote, a sewing workshop or a small neighbourhood shop often starts with a microloan from a Malagasy MFI. ACEP, PAMF and Banque Baobab finance working capital, then raise amounts after several regular repayments.
Leasing to equip the business
Since April 2026, BMOI has offered SMEs leasing with no initial down payment, covering vehicles, machinery and IT equipment. Vehicle leasing in Madagascar also makes it possible to acquire a delivery van without tying up cash.
Growth sectors and export chains
SAVA vanilla, cloves, east-coast lychees, shrimp, free-zone textiles, tourism on Nosy Be or Sainte-Marie and food processing attract finance. Exporters also earn revenue in foreign currency, which Malagasy banks view very favourably when assessing a file.
Collateral and personal contribution
Banks often require a personal contribution, a mortgage on titled land, a pledge over the business or the manager's personal guarantee. Public programmes sometimes ease these demands without removing them for the largest amounts.
Young graduates and a first business
A graduate of the University of Antananarivo or Fianarantsoa who has never held a salaried job rarely has savings to contribute. Funding studies in Madagascar shows that public grants cover little, hence the appeal of schemes for young entrepreneurs.
The cost of business credit in 2026
With the Banky Foiben'i Madagasikara policy rate raised to 12.5% in August 2026, bank lending to businesses remains expensive. The preferential rates of public programmes are all the more sought after by small firms.
Tax compliance and regular returns
A business that is up to date with its filings at the Directorate General of Taxes presents a more credible file. A tax compliance certificate and filed balance sheets are among the documents requested for a large investment loan.
Building a Malagasy business financing file
- Register the business with the EDBM or the regional one-stop shop and obtain the NIF, statistical card and trade register entry.
- Write a business plan costed in ariary: investment, forecast turnover, expenses and monthly cash flow.
- Identify the right source, whether MFI, bank, leasing or the Fandroso programme, according to amount and track record.
- Open a business account and run takings through it to build a banking history.
- Prepare collateral: land title, guarantee, pledge over equipment or personal contribution.
- Submit the file, answer the analyst's questions and negotiate any grace period on repayment.
Costs of business finance in ariary
| Element | Benchmark | What makes it vary |
|---|---|---|
| Historical Fihariana rate | 9 to 11% (indicative) | Programme and partner bank |
| Fandroso loan | Up to 60 million ariary at a reduced rate | Tsiry or Tafita strand, project viability |
| Standard bank rate | Specific to each bank | Collateral, sector, policy rate |
| File and collateral fees | Depends on the institution | Amount and type of collateral |
| Company formation | EDBM administrative fees | Chosen legal form |
Standard file for a Malagasy entrepreneur
- Manager's CIN and company articles of association
- NIF, statistical card and trade register extract
- Business plan and cash-flow forecasts
- Balance sheets and income statements for recent years if the business exists
- Business account bank statements
- Pro forma invoices for the equipment to be financed
- Land title or other proposed collateral documents
What blocks a loan for an entrepreneur
- Seeking finance for an unregistered business, with no NIF or statistical card, which the bank cannot assess.
- Mixing personal accounts and business takings, which makes it impossible to prove the activity's real profitability.
- Paying a middleman who promises a guaranteed place in a public programme such as Fandroso in exchange for cash fees.
- Underestimating working capital needs in ariary and spending the whole loan on equipment, then running short of stock or cash in the first months.
- Submitting a copied business plan with no realistic figures on local prices and competition.
Financing a business in Madagascar: key points
Who can benefit from the Fandroso programme?
It targets young project founders and small and medium-sized enterprises. The Tsiry strand covers start-ups, the Tafita strand growth or restructuring. Applicants must present a viable, sustainable project with economic and social impact.
Does Fihariana still exist?
Fihariana was launched in 2019 under the previous presidency. Since the Refoundation, the authorities have presented Fandroso as the new national programme supporting young entrepreneurs. Check with the official offices which schemes remain open.
Can a Malagasy MFI finance an SME?
Yes, several microfinance institutions offer loans to small businesses beyond starter microcredit. Amounts remain lower than those offered by banks, but collateral and bookkeeping requirements are often noticeably more flexible.
Do you need a personal contribution for a business loan in Madagascar?
Banks generally ask for a contribution, whose size depends on the project and collateral. Equipment leasing offered by some banks can do without one, since the financed asset remains the lessor's property until the purchase option is exercised.