Africa’s development, bolstered by strong economic potential, is experiencing exceptional growth. Yet the African market remains underserved by investors and the capital deployed on the continent is still insufficient. Africa’s financing needs can be clearly seen and are one of the main challenges for its development.
In this context, private equity can play a decisive role for the ecosystem of African SMEs, not only by providing capital to finance them over the long term, but also by giving strong support to entrepreneurs on their growth path. One way to strengthen the African private equity industry is to support the development of a French or European private equity investor in a process to raise their first fund dedicated to Africa.
In line with the declaration made by the French President in Ouagadougou in November 2017, by which France pledges to support the development of private equity investment in Africa, PROPARCO is today launching a Call for Expressions of Interest for an investment fund dedicated to African SMEs.
Bruno Le Maire, Minister of the Economy and Finance, stated: “We have decided to make private equity investment one of the pillars of our range of financing in Africa. PROPARCO’s commitment could get more private investors to take the plunge and meet the financing needs of African SMEs.”
Following the process to select the manager, PROPARCO will support the raising of this fund, which has a target size of EUR 100m to EUR 150m. By investing an amount to catalyze the raising of this new fund and by attracting new private investors, PROPARCO is reiterating its commitment to its African partners, as it is already actively supporting funds that already operate in Africa.
A fund that strengthens the Choose Africa mechanism
The Choose Africa initiative, which was launched in March 2019, has earmarked EUR 2.5bn to finance and support African start-ups, microenterprises and SMEs by 2022. This initiative is led by AFD Group and mobilizes all AFD and PROPARCO’s tools in order to provide unparalleled assistance to African companies. EUR 1bn will be invested in equity in African start-ups, microenterprises and SMEs and EUR 1.5bn will be earmarked to facilitate access to credit for small and medium-sized enterprises via local public or private financial institutions (microfinance institutions, banks, leasing companies, etc.). A total of some 10,000 African small and medium-sized enterprises will benefit from Choose Africa, including 600 via equity investments. Through this initiative, France, via AFD and PROPARCO, is reaffirming its commitment alongside African entrepreneurs and to Africa’s economic development.
All the solutions proposed by Choose Africa are available on the www.choose-africa.com platform, which is an information and guidance portal for entrepreneurs and AFD Group’s partners.
If you would like more information, you can write to the following address: AMIproparco@proparco.fr