The African Development Bank Group (AfDB) has approved a €5 million equity investment in innovative impact investment company Investisseur & Partenaire pour le Développement 2 (IPDEV.2)to support Small Growing Businesses (SGBs) in sub-Saharan Africa.
PPDEV.2 was launched by Investisseurs & Partenaires (I&P) to provide financial and technical support to SGBs and start-ups at the base of the pyramid of small and medium-sized enterprises (SMEs) which despite being great drivers of development and inclusive growth.
It seeks to fill SGB financing gaps by kick-starting early investing in African SGBs “through a model that attracts African capital toward the underserved segment of SMEs and strengthens local asset managers capacity; builds an impact investment industry in some of the least developed countries in Africa and fosters development of indigenous investment teams capable of financing early stage businesses; and accelerates the emergence of entrepreneurship on the continent.”
IPDEV.2 plans on launching 10 investment funds in Low Income Countries including Senegal, Cote d’Ivoire, Benin, Mali, Niger, Burkina-Faso, Cameroon, DRC, Ghana and Madagascar to provide equity, quasi equity and debt to over 500 SGBs with investments ranging
from €30,000 to €300,000 over the next 10 years.
Each of the funds will be managed by a local team identified and trained by I&P. They will have a capitalization of between €2 and €5 million, of which IPDEV.2 will take a maximum 30 per cent stake with the remaining 70 per cent raised locally through I&P’s established network.
I&P and national Fund Managers have already succeeded in attracting commercial investment from banks, corporate, insurance firms, sovereign funds, seasoned entrepreneurs and other financial institutions such as ASKIA, Société Générale Bank, Fonsis and Sonatel to launch investments funds in Senegal, Burkina Faso and Niger.
IPDEV.2 is aligned to AfDB’s High Fives to light up and power Africa, feed Africa, industrialise Africa, integrate Africa and improve the quality of life for the people of Africa.