Unlocking Equity for Early Stage Entrepreneurs in Africa

David Munnich and Hugues Vincent-Genod, Investment Officers at Investisseurs & Partenaires, published an article on the blog managed by Business Fights Poverty, a large network of business and development professionals. The article explores the following issue: is it possible to invest equity in African early-stage companies in a sustainable manner?

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The Article underlines the necessity of supporting Small and Medium Enterprises in order to promote a sustainable and inclusive growth on the African continent: “No economy has ever sustainably fought poverty without developing SMEs, employment and an economic fabric. The yearly 5%-growth rate in Africa will not reduce inequalities if it remains circumscribed to the sectors of infrastructure, IT and oil & gas. That is why, if we want growth in Africa to be inclusive, we have to come up with an innovative way for small companies to have their say and their way.”

To meet the specific needs of African SMES, I&P is developing a new investment strategy, described by D. Munnich and H. Vincent-Genod. I&P launched SINERGI Niger in 2008, the first investment fund based in Niamey dedicated to small and Growing Businesses (SGBs). Today, SINERGI NIGER has invested in equity and quasi-equity in 8 start-ups for an average of 50,000 euros per investment. Thanks to the 2014 Argidius-ANDE Finance Challenge (AAFC), I&P was able to replicate this sustainable model to neighboring Burkina Faso, and launch SINERGI BURKINA, a EUR 2,5 million investment company with local shareholders. The objective is now to scale up and launch 10 African investment companies led by African Teams. Through this innovative strategy, I&P strives “to promote early-state companies and entrepreneurs and generate inclusive growth in Africa”.

Launched in 2008, Business Fights Poverty is defined as the “world’s largest community of professionals harnessing business for social impact”. As explained by the Founder and Director Zahid Torres-Rahman, the community promotes a new approach to international development, “one that sees poor people as agents of their own development, and that focuses on what they themselves see as their best strategy for escaping poverty: getting a job or growing a business”