AfDB Injects €7m Private Equity into SME Fund in Francophone Africa

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The Board of Directors of the African Development Bank (AfDB) recently approved a €7 million equity investment in the I&P Afrique Entrepreneurs SME Fund (IPAE). This will allow IPAE to increase access to finance and capacity building for small and medium-sized enterprises (SMEs) and small microfinance institutions (SMFIs) in western and central Africa, thereby boosting income generation and job creation in the region.

This new fund will complete the range of financial vehicles managed by Investisseur & Partenaire among which I&P Développement (IPDEV), a private investment company, created in 2002, investing in SMEs and SMFIs in French-speaking sub-Saharan Africa. The IPAE Fund, targeting a final closing of €50 Million, will seek out high potential SMEs and SMFIs primarily in western and central Africa. Secondary focus countries, based on an opportunistic approach, will be located in the Indian Ocean region. The Fund will target SMEs across various industry sectors including healthcare, building materials and agribusiness.

Investisseur & Partenaire already has a good track record of managing investments in SMEs and MFIs in various sub-Saharan African countries. IPDEV current portfolio of more than 30 investments has created more than 1,400 permanent jobs and provided financial assistance to more than 30,000 people. The IPAE Fund approach has been tailored to achieve similar results, including support to women entrepreneurs and development of the private sector in fragile states. Moreover, it will demonstrate to local financial institutions that local entrepreneurs present a good investment opportunity.  

Tim Turner, AfDB’s private sector and microfinance director, said: “The project’s main development outcomes are expected to stem from private sector development and positive effects on inclusive growth through its focus on sectors such as agribusiness, health, and microfinance, as well as support to fragile states and rural areas, all of which are expected to produce positive social effects.

Collectively, the fund’s investee companies are expected to generate more than €170 million of additional taxes, more than €100 million of additional trade and close to 2000 new jobs.”