All the instruments of the AFD Group (Agence Française de Développement and its private sector financing-arm, Proparco) will be mobilised in order to support close to 10,000 African businesses at various stage of their development.
MSMEs – key vectors in job creation and growth but struggle to secure financing
Small businesses and start-ups play a key role in creating jobs and boosting economic growth and innovation. In Africa they are set to play an integral part in integrating the 450 million young people who are expected to arrive on the African job market between now and 2050.
However, a lack of adequate and suitable financing remains a huge obstacle, hampering the business ambitions of entrepreneurs and hindering their development potential. At present, only 20% of African SMEs have access to a bank loan and 87% of start-ups do not have access to any funding.
AFD Group – partnering with African start-ups and MSMEs
The Choose Africa initiative being launched today will invest €2.5 billion into financing and partnering with African start-ups and MSMEs. With the backing of the AFD Group, this initiative will harness all of the resources of AFD and Proparco to provide unprecedented support for African small business.
Fulfilling President Macron’s Ouagadougou commitment, made in November 2017, €1 billion in equity investment will be mobilised for African start-ups and MSMEs. A further €1.5 billion will also be used to facilitate access to credit for MSMEs via a wide range of local public or private financial institutions (for example, microfinance institutions, banks, leasing companies, etc.).
A total of 10,000 African SMEs are intended to benefit from Choose Africa and 600 of these businesses will receive equity financing. The French government – through the offices of AFD and Proparco – is using this initiative to reaffirm its support for African business and support local economic development across the continent.
Diverse solutions tailored to the needs of African MSMEs
Choose Africa will provide a gateway to the full range of solutions offered by AFD and Proparco to African start-ups and MSMEs:
• Financing to meet the specific needs of businesses depending on their stage of development. AFD provides equity financing and promotes access to credit for MSMEs, through loans earmarked for SME lending, granted to financial institutions in Africa, or guarantees to banks to share the associated SME risk.
• Technical and strategic support to accompany local financial partners, as well as start-up and MSME beneficiaries, in their strategies, operations and environmental, social and governance practices. The AFD Group also supports the development of local incubator and accelerator structures, to accompany start-ups and SMEs with high-impact potential become investment ready, sustainable and scalable.
• Support to the development of local entrepreneurial ecosystems that are favourable to entrepreneurship and innovation, in order to promote local economic development and SME competitiveness.
Businesses and partners of AFD Group can find out more about all of these solutions and who they should contact at www.choose-africa.com, AFD Group’s dedicated information portal.
Introduction to Choose Africa
Introduction to Choose Africa, the French initiative to accelerate the growth of MSMEs and entrepreneurship in Africa