GroFin Africa Fund has invested $35 million to empower small and medium enterprises in East Africano promote economic growth.
Entreprenuers from Tanzania, Uganda, Kenya and Rwanda are among the beneficiaries of the fund.
Guido Boysen, chief investment officer of GroFin in Tanzania said, “Besides providing risk finance, we also provide hands-on business development assistance to aid the success of our investee companies.”
Mr Boysen added that GroFin’s success can be attributed to its presence on the ground.
GroFin’s vision is for local businesses to create sustainable prosperity.
“We have targeted to be the leading small and medium enterprise financier,” said Mr Boysen.
The fund’s mission is to create sustainable economic growth, wealth and employment creation through the development of successful SMEs, while generating attractive returns for all stakeholders.
General manager of GroFin Tanzania Ezra Musoke said SMEs are the driving force of any economy and that the biggest challenge in Africa is how to make them successful.
“What leads to their high failure rate is the lack of access to finance, and this is why GroFin and its investors saw the need to establish this fund which will make funds available for SMEs in Africa,” said Mr Musoke.
He explained that local SMEs often do not have access to financial products on offer by commercial banks due to lack of adequate collateral, track record or because they are mainly start-ups or still in incubation period.
Mr Musoke said GroFin Africa Fund will finance up to 500 SMEs in Africa which lack risk financing. The fund will make investments ranging from $100,000-$1 million in target companies.
GroFin is also looking into improving management capacity of SMEs to make them regionally and globally more competitive and therefore more attractive to potential buyers and lenders.
Through GroFin’s value-added investment approach, the Fund’s team will provide hands-on monitoring and guidance on management issues to these SMEs.
GroFin Tanzania was established in 2006 and so far has provided $5 million to SMEs in different sectors among them manufacturing, services as well as wholesale and retail.
GroFin’s business development assistance has proved to be a great success with SMEs.
In Kenya, the GroFin Africa Fund was established in 2005 and so far has provided $10 million. It started operations at the same time in Uganda and has so far provided a similar amount of money. In Rwanda it has provided $4 million since it started business there in 2007.
The fund’s money comes from several investors including Africa Development Bank, Capital for Development, International Finance Corporation, World Bank, and FMO the Netherlands Development Finance company.
GroFin Africa Fund is a multinational specialist SME finance and development company offering an innovative combination of risk capital and business development assistance to viable enterprises.