Central African SMEs to get private equity support.
The World Bank has launched a multi-million dollar private equity fund to support small businesses in central Africa.
The bank’s International Finance Corporation (IFC) has committed US$12.5mn to the Central Africa SME Fund and hopes to raise an additional US$25mn from other development agencies and the private sector.
It launched the initiative to improve access to finance, boost employment and reduce poverty in some of Africa’s least developed countries. It will be managed by Dutch social investment fund manager XSML and Cameroon-based Cenainvest and will initially focus on businesses in the Central African Republic.
The fund will make investments of between US$100,000 and US$500,000 and will target companies in sectors including agriculture, IT, telecoms, transport, warehousing and tourism.
The IFC’s executive vice president and chief executive, Lars Thunell, said supporting small businesses in Africa’s poorest economies is a priority. “The Central Africa SME Fund is an important part of IFC’s efforts to improve access to finance for entrepreneurs and create opportunities for people in places that need it the most.”
The fund will also encourage the long-term and sustainable development of the companies it invests in by advising their directors on implementing better corporate governance as well as how to raise their environmental and social performance.
This is the first of several private equity funds the IFC plans to launch under its SME Ventures programme in the coming months, all of which will back SMEs in Africa’s poorest regions and in countries emerging from conflict.
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