The fund, has the target to invest in roughly 500 small and medium enterprises in over a period of five years.
To date the fund has committed $17m to 50 transactions and is currently considering investment into a further 24 companies to the value of $8m. The fund works in Nigeria, Ghana, Rwanda, Kenya, Tanzania, Uganda and South Africa investing between $100,000 to $1m in SMEs operating in various sectors of the economy ranging from manufacturing to retail and services.
Following a first close of $140m in the fourth quarter of 2008, recent commitments by the European Investment Bank (EIB) and PROPARCO (AFD Group), through the Investment and Support Fund for Businesses in Africa (FISEA), brought about the final close of $170m.
The EIB and FISEA join African Development Bank, CDC, International Finance Corporation, FMO, Norfund, Shell Foundation and GroFin Investment Holdings as investors to the fund.
Jurie Willemse, Managing Director of GroFin waas reported as saying: “This is a clear demonstration of the high levels of interest that investors have for smaller investments in that deliver both quantifiable investment and development returns. The confidence shown in the GroFin team and our unique business model, that integrates risk finance with business development assistance to mitigate the investment risk, is heartening.
“The enterprise sector represents an exceptional investment and development opportunity at this time and has illustrated resilience through the economic crises. There are an ever growing number of entrepreneurs in Africa looking to start and grow companies and our viability based model – specifically developed for the African market – makes real returns possible in a segment that is overlooked by most investors”.