CDC Commits $39.2m To Support SMEs
CDC Group, the United Kingdom’s publicly owned impact investor, has announced the commitment of $39.2m to support the Small and Medium Enterprises in West Africa.
The company said in a statement on Monday that it was backing Verod Fund III and Adiwale Fund I with commitments of $19.2m and $20m respectively as they were West African-based private equity funds targeting the SMEs in the region.
It noted that in West Africa, banks and low levels of private equity activity were struggling to meet the financing needs of the SMEs, which was hampering their potential as engines of economic growth in the region.
The statement read in part, “Access to finance is cited as the top barrier for doing business in Nigeria and Ghana. Increasing access to capital to this market is a core element of our African strategy by backing well-networked, experienced local teams.
“This should in turn support private sector development, economic growth and long-term sustainable employment, particularly for the semi-skilled and low-skilled workforce in the region.”
CDC said its initiatives would generally contribute to Sustainable Development Goal 8 focused on decent work and economic growth.
The Chief Executive Officer, CDC Group, Nick O’Donohoe, said the SMEs should be the engine room of regional economies in West Africa but were being held back by the lack of access to finance.
He stated that as the largest private equity investor in Africa, CDC was committed to boosting access to finance for businesses.
He said, “Investing in the SMEs enables our capital to go further and we expect that positive returns will generate an important demonstration effect and help mobilise further capital into these markets, encouraging more commitments towards the United Nations Sustainable Development Goals.
“Mobilising capital into West African SMEs will in turn support private sector development, economic growth and long-term sustainable employment, particularly for the semi-skilled and low-skilled workforce in the region, therefore contributing to Sustainable Development Goal 8: decent work and economic growth and the SDG 7: partnership for the goals.”