The Regional MSME Investment Fund for sub-Saharan Africa, a mouthful of a fund known as REGMIFA, aims to foster a diverse funding ecosystem to help small enterprises in Africa grow and thrive. Created by German Development Bank KfW in 2010 and managed by Symbiotics Asset Management, the blended finance vehicle provides debt to mid-sized banks, fintechs and microfinance institutions for on-lending to micro, small and medium-sized enterprises, as well as technical assistance to borrowers.
REGMIFA has secured $20 million from the Dutch and Austrian development finance institutions, FMO and Oesterreichische Entwicklungsbank. The commitment enables FMO “to reach smaller financial institutions and end-beneficiaries” in markets outside of its portfolio, with a focus on women, said FMO’s Juan Jose Dada Ortiz.
Ecosystem building
Quasi-public development finance institutions are a key channel of capital for financing for Africa’s micro and small businesses, which often struggle to meet traditional lenders’ requirements for collateral or credit histories. FMO earlier this month extended €270 million ($295 million) to Nigeria’s Access Bank to lend to women and youth-led small businesses.
The International Finance Corp. has supported banks within and outside Africa, including Bank of Africa, Stanbic Bank Zambia, Societe Generale Ghana and Kenya Commercial Bank to facilitate on-lending.
The African Guarantee Fund in March offered a $50 million guarantee to help the United Bank for Africa disburse $100 million in loans to small and medium-sized enterprises in 20 African countries.
