Afri-Invest West Africa has entered into a partnership with Syntaxis Capital Africa to float a N12bn private equity fund to bridge the financing gap for the Small and Medium Enterprises sector of the economy.
The inauguration of the fund was done in Abuja in the presence of key capital market stakeholders including the Acting Director-General of the Securities and Exchange Commission, Mary Uduk.
The fund is expected to be injected into small and medium scale businesses in various sectors of the economy.
Some of the sectors are manufacturing, agro-processing, healthcare, education and financial services.
Speaking at the event, the Group Managing Director of Afrinvest, Ike Chioke, explained that the focus of the fund was to deepen financial inclusion for SMEs by providing long term capital for their operations.
He said the fund would provide a viable option for operators of SMEs that were looking for the growth of their businesses.
The Partner and Managing Director, Syntaxis Capital Africa, Adesuwa Okunbo, described the financing gap for SMEs as huge, adding that the fund would serve as a vehicle for rapid economic growth and development.
She said, “By providing access to capital to SMEs, we are giving businesses the power to scale their activities, which will in turn increase productivity, create new jobs and generate taxes for the government.
“In addition, the fund has a unique focus on supporting women-owned or managed businesses in order to improve the ratio of women in the workforce and enhance the standard of living across the board.”
In his comments at the event, the Managing Director, Afrinvest Asset Management, Ola Belgore, said the fund would support the growth of SMEs in the country in line with the agenda of the government.
He said without access to funding, many of the businesses would struggle to stay afloat.
“Qualified investors can, therefore, expect a high level of contractual income combined with significant minority equity stakes, superior risk adjusted returns, strong equity upside, and capital preservation,” he added.
Based on official statistics, SMEs contribute up to 60 per cent of employment opportunities and up to 40 per cent to the nation’s Gross Domestic Product.
However, access to funding remains a critical drag on the performance of many of the businesses.