AFRICA: $60 million for an SME impact investment vehicle

A new facility will support impact investments by small and medium-sized enterprises (SMEs) in developing countries, many of which are in Africa. This is the Bamboo-UNCDF initiative for least developed countries (BUILD), which was recently launched on the sidelines of the Finance for Development Forum in New York, United States of America. As the name suggests, it is an initiative of the United Nations Capital Development Fund (UNCDF) and Bamboo Capital Partners, a Luxembourg-based impact investment firm.

The fund aims to attract concessional, semi-commercial and commercial growth financing for start-up companies, particularly in the agriculture, renewable energy and financial inclusion sectors, with the ultimate goal of making progress towards the development goals (SDGs).

Funding from several development partners

“BUILDFund is one of the few investment funds on the market that focuses on developing countries. Through the Build Fund, Fenu and Bamboo Capital Partners aim to bridge the financing gap that affects SMEs, including women entrepreneurs in markets where growth is limited by a lack of access to follow-on finance. This financing gap, also known as the “Missing Middle”, occurs when the capital needs of businesses and projects are too large for microfinance institutions and too small for commercial financing,” explains Bamboo Capital.

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As part of this initiative, the investment company headed by Jean-Philippe de Schrevel has obtained funding from several development partners. This is the case of the Nordic Development Fund (NDF), which contributes $10 million to the BUILD fund. The American Development Finance Corporation (DFC) is participating in the implementation of the initiative with funding of $10 million. The Swedish International Development Cooperation Agency (SIDA) is also partnering with DFC to provide $10 million in loan guarantees.

Canadian funding

Global Affairs Canada, the Canadian government’s foreign trade institution, is unquestionably the largest financial partner of the BUILD Fund with a contribution of more than $19 million dedicated to absorbing the first financial losses of SMEs. In addition to this financing, more than 5 million dollars have been allocated to the so-called “Builder” technical assistance mechanism, which will be managed “in complete autonomy” by Fenu.

Other funding comes from Luxembourg (over $2 million) and Norway ($3 million) through the Norwegian Agency for Development Cooperation (NORAD), which is also providing $900,000 for the assistance mechanism. Builder technique.

Jean-Marie Takouleu

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