CDC Develops Enterprise-Based Culture In Africa

CDC has joined forces with the Shell Foundation charity and African SME finance and development company GroFin to highlight the potential of growth finance to become a multi billion dollar industry within the next decade. Growth finance supports SMEs unable

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CDC has joined forces with the Shell Foundation charity and African SME finance and development company GroFin to highlight the potential of growth finance to become a multi-billion dollar industry within the next decade.

Growth finance supports SMEs unable to attract capital because they are too big for microfinance and too small for commercial banks and private equity. Growth finance attempts to plug this gap, typically involving sums of between $10,000 and $2m.

One hundred and six million of the worlds poorest families received a microloan in 2007 growth finance has the potential to reach many, many more, says Richard Laing, chief executive, CDC.

To develop growth finance, the industry needs to introduce slick processes to drive the volume of transactions, create standard structures and standard processes. We also need to demonstrate that this asset class can generate good financial returns.

The Shell Foundation and GroFin act as venture capitalists in the development space, says Chris West, director, Shell Foundation.

The problem is not a shortage of entrepreneurs in Africa, it has been to give these people the necessary investment and support to help their business grow. We provide a return on investment by helping SMEs to succeed using an enterprise-based approach.

L.D.

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