Regmifa

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MSMEs across Africa barely have access to long-term debt instruments to finance their growth. As a result, they are unable to seize opportunities to develop and expand in new markets, and are prevented from hiring more workers. People need to secure a household income to have access to fundamental services such as health care and education, and to improve their living conditions. Therefore employment creation plays an essential role in alleviating poverty and reducing the effects of the economic crisis in Africa.

In response to the need of developing a strong private sector in Sub-Saharan Africa, European development finance institutions recently initiated the establishment of the Regional MSME Investment Fund for Sub-Saharan Africa (REGMIFA), a unique initiative endorsed by the G8 in 2007.

REGMIFA is an open-ended debt fund dedicated to providing microfinance institutions in the region with a broad range of key financing instruments, including long-term debt, quasi-equity and guarantee schemes. Regmifa will finance approximately 50 financial institutions, which in turn will lend to over 300,000 small businesses in local currency (approximately 80% of the Fund’s exposure), and aims to develop a credit portfolio of about USD 200 million by 2015.

BIO committed USD 5 million in equity to REGMIFA. The project is completely in line with its mandate as it will enhance the reputation and standing of a still immature sector, mobilise additional private capital, and help to further broaden and deepen the financial sector overall.  Ultimately, this will improve the penetration of financial services throughout the region, ensuring access to finance for a much broader segment of the population.  The increase in income generated through access to credit will directly secure and generate employment, in turn increasing household income and indirectly raising living standards.

Investors participating in the fund committed more than USD 150 million at the first closing. In addition, Regmifa will be enhanced with a Technical Assistance Facility (TAF), which has been set up as an independent structure managed by Symbiotics. The TAF to which BIO is also a contributor will focus on practical implementation assistance to client institutions and on capacity building. It will mainly aim at the smaller institutions to help them increase their outreach. The fund will be managed by Symbiotics Investment Management S.A.

Website : www.regmifa.com

  • Investment amount (€):

    € 3,874,127.40

    Registered offices: Luxemburg Beneficiary countries: Ghana, Kenya, Senegal, Nigeria, Cameroon, Tanzania, Uganda, Benin, Zambia, Mozambique, Angola, Togo, Ivory Coast

  • Contract signature :

    2010

  • Nature of intervention :

    Equity

  • Development impacts :

    • 1 — Ensure access to financial services
    • 2 — Job creation

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