Choose Africa: the French initiative to promote African entrepreneurship

• Loans to local financial institutions

Proparco provides lending solutions to African financial institutions to meet the needs of businesses. The aim is to enable these intermediaries to support SMEs through debt rescheduling and restructuring, bridge financing and recovery loans.

• Direct investment by Proparco in businesses 

Proparco grants direct loans to larger SMEs operating in key sectors of the local economy (agriculture and agri-food, healthcare, education, tourism, etc.) that have been impacted by the crisis.

• Guarantees to encourage local banks to lend to microbusinesses and SMEs 

 AFD Group has set up a guarantee programme similar to the French State-Guaranteed Loan scheme (PGE). The aim is to support business continuity and preserve jobs in microbusinesses and SMEs located in regions where support is insufficient.

• Private equity 

AFD Group, through Proparco and the FISEA+ facility, supports African SMEs with equity financing, both directly and via partner investment funds.
 The aim is to ensure the long-term viability of businesses whose models were sound before the crisis, but which now find themselves with degraded balance sheets and operational metrics.

• Improving and structuring their governance and internal management
• Enhancing environmental and social practices through advisory services 

• The Digital Africa Fund for seed-funding start-ups 

Under the Digital Africa initiative, AFD partners the most vulnerable digital start-ups embarking on their entrepreneurial journey. It aims to facilitate access to seed funding through a range of tools and to support entrepreneurs as their businesses grow and mature.

• The Fuzé Fund for start-ups in the pre-seeding phase

Under the Fuzé initiative, AFD partners African start-ups developing tech solutions for the real economy. The programme provides a mezzanine investment model focused on pre-seed funding, with two successive rounds of investment tailored to each start-up’s stage of development.

• Direct venture capital investments by Proparco or FISEA

Proparco invests in the equity of start-ups seeking to scale up their innovative solutions. Investments (ranging from €500,000 to €3 million) target businesses with solid results, an experienced management team and major growth ambitions.

FISEA invests in the initial round of funding of start-ups (seed or pre-Series A) to supplement the financing required to launch them. It may also invest in subsequent rounds for start-ups it has already supported in order to continue providing long-term support.

• Venture capital investments via local partner funds  

Proparco and FISEA also support venture capital funds that invest in African start-ups and SMEs in the early development or growth phase. Through these local partner funds, businesses can access financing and benefit from sector-specific expertise, in-depth knowledge of local markets and training to boost their development.

• Scaling up: structuring and enhancing governance

Proparco helps start-ups to address the key challenges associated with scaling up. This support is based on three pillars: structuring and strengthening capabilities during the hyper-growth phase; helping management teams to manage growth and take strategic decisions; and consolidating and developing markets.

• The Afric’Innov and AfriLabs programmes: supporting local entrepreneurial ecosystems 

Through the Afric’Innov and AfriLabs programmes, AFD supports business incubators, accelerators and hubs that stimulate African innovation and entrepreneurship, offering them capacity-building and technical assistance programmes.

• Digital Africa: supporting digital innovation in Africa

Digital Africa helps African digital entrepreneurs roll out innovations that benefit the real economy. It is based on three pillars: building capacity in high-impact start-ups; facilitating access to funding to develop their technological innovations; and supporting public policies that foster digital enterprise across the continent.

• The Social And Inclusive Business Camp 

The Social and Inclusive Business Camp  programme helps African entrepreneurs with a strong social impact to develop and scale up their businesses. It brings together a community of over 60 entrepreneurs, offering them the opportunity to engage with experts, share their experiences and best practices, and expand their professional network.

• The AFD Digital Challenge

The AFD Digital Challenge is an annual competition that awards prizes to between five and ten start-ups that have developed innovative solutions for the African continent. Top prizes include €20,000 plus a year’s support to continue working on a project.

• Venture capital fund

Through Proparco and FISEA, AFD Group invests in venture capital funds with commitments ranging from $3 million to $7 million. These funds are active at all stages of development (from pre-seed to Series C) and support start-ups developing innovative solutions to facilitate access to essential goods and services. 

Priority is given to experienced teams capable of providing effective support to the companies in their portfolio, with initial investments generally ranging from $0.5 million to $5 million. Proparco and FISEA may also make direct equity investments and explore co-investment opportunities with partner venture capital funds.

• Private equity funds

Proparco, via FISEA, invests in funds targeting African SMEs, with commitments ranging from $3 million to $20 million. For funds operating in Border Countries, FISEA may invest in junior tranches in addition to senior tranches. These funds prioritise sectors with a strong social impact (agriculture, health, education) as well as job-creating enterprises (manufacturing industries and services). 

The focus is on private equity strategies geared towards creating operational value, with investments ranging between $1 million and $20 million. Proparco and FISEA also have direct investment capabilities for larger transactions and explore co-investment opportunities with partner fund managers.

• ARIZ private equity guarantee  

AFD provides investment funds financing Social Businesses with an ARIZ Guarantee covering up to 50% of their equity or quasi-equity investments in these companies.

• Strengthening advisory capacities

Either Proparco or FISEA may allocate a technical assistance (TA) budget to their partner investment funds. This enables the funds to help their portfolio companies to enhance their performance (management, human resources, finance, marketing) and their environmental and social impact, notably through the implementation of monitoring systems and E&S plans.

FISEA’s TA can also be mobilised to boost the expertise of partner fund management teams around impact and accountability issues. The focus is on managing environmental, social and governance (ESG) risks, gender equality, combating climate change and impact measurement.

• Training and networking

The African Private Equity Fellowship is a unique training and networking programme dedicated to investors across the continent that provides talented young professionals with the opportunity to meet their peers and mentors during an “executive programme”, in liaison with the continent’s leading funds, France Invest and AFD Campus.

• AFRIC’INNOV & AFRILABS: building capacity and advisory services

AFD is deploying a technical assistance programme designed to strengthen the capacity of support structures with the aim of providing sustainable support to new innovative businesses across Africa. This initiative comprises two core networks: Afric’Innov and AfriLabs.

• AFIDBA: supporting inclusive businesses

AFIDBA, initiated and funded by AFD, aims to identify, support and finance inclusive start-ups with a social dimension in four African countries: Morocco, Ghana, Senegal and Burkina Faso. Once technical assistance has been completed, the most promising start-ups receive an interest-free loan enabling them to raise further amounts from other investors.

• Debt instruments

Proparco provides local financial institutions with:

Tier 2 subordinated debt for amounts ranging between €5 million and €25 million over 5–10 years (in EUR or USD), to strengthen banks’ capital base and support their development in the SME segment. 

Senior loans of between €10 million and €100 million (in EUR or USD), over 4 to 12 years, to finance the growth of banks’ SME portfolios. 

Subscription to ‘Social Bond’-type issues as defined by the ICMA, with the proceeds earmarked for SME financing.

• Strengthening equity capital

Proparco invests directly in equity over periods of 5 to 8 years. The amounts invested vary depending on the type of institution:

Banks and leasing companies: between €15 million and €25 million

Microfinance institutions: between €3 million and €20 million

FinTech start-ups: between €500,000 and €3 million.

Investments may also be made via investment funds or through FISEA, particularly for the benefit of small Tier 2 or Tier 3 financial institutions. 

• ARIZ and ARIZ MINKA SME guarantees 

The ARIZ Guarantee, initiated by Proparco, enables financial institutions to cover 50% of an individual loan to an SME, 75% of an individual loan to a microfinance institution, or 50% of a portfolio of African SME loans. 

The ARIZ MINKA SME guarantee, initiated by Proparco, enables financial institutions to cover up to 80% of loans to microbusinesses and SMEs in certain crisis-hit regions in Africa and the Middle East.

• MENA facility

The MENA facility:, initiated by AFD, IFC and the European Commission, helps private financial institutions in North Africa (Algeria, Egypt, Morocco and Tunisia) to provide guarantees tailored to the risks associated with financing SMEs, particularly in sectors with a high impact on development, while covering part of the cost of credit in local currency.

• EURIZ Guarantee

The EURIZ Guarantee , initiated by AFD, facilitates access to credit for SMEs in the Africa, Caribbean and Pacific (ACP) region. It targets SMEs with a high development impact and all SMEs in fragile countries by enabling partner financial institutions to cover part of the risk associated with loans.

• Trade Finance Guarantee Programme

The Trade Finance Guarantee (TFG) programme, initiated by Proparco, enables developing countries to secure financing. It protects the exporter’s bank against the risk of default by the importer’s bank by means of a letter of credit, a standby letter of credit or endorsed drafts.

• Enhancing their environmental and social management, governance and promotion of gender equality.
• Developing tailored financial solutions and non-financial services dedicated to SMEs (training, coaching, implementation, energy efficiency and renewable energy projects).
• Partnering their digital transformation.