Maghreb SMEs to benefit from new investment funds

Sep 13, 2011

Two new investment funds have just been created in the Maghreb region to help small and medium-sized enterprises (SMEs) fund their projects.

Two new investment funds have just been created in the Maghreb region to help small and medium-sized enterprises (SMEs) fund their projects.

According to the Organisation for Economic Co-operation and Development, SMEs in Africa are weak because of small local markets, undeveloped regional integration, poor infrastructure and unattractive tax regimes.

They often cannot meet the banks' requirements to obtain credit due to a lack of guaranties and not enough information regarding their ability to repay loans.

This challenging environment has led the African Development Bank (AfDB) to create the Maghreb Private Equity Fund III LLC (MPEF III), benefiting from a €96 million commitment following its first capitalisation.

MPEF III is managed by the TunInvest - AfricInvest group and will invest in SMEs in Algeria, Lybia, Morocco, Tunisia and less frequently in Egypt.

It will target companies well established in their local market and looking to expand regionally and internationally, mainly in the export, health, technologies, telecoms, services, education, transport and food sectors.

AfDB is the biggest investor of the MPEF III, providing €20 million. Other investors include development agencies such as the International Finance Corporation and the German Development Agency.

This announcement follows the creation of the €30 million SANAD fund, set up in August 2011 by German development bank KfW Entwicklungsbank with funding from the German Ministry for Economic Cooperation and Development and the European Commission.

The fund will invest in business in Egypt and Tunisia, as well as Algeria and Morocco. It will offer financing to partner institutions that serve micro, small and medium enterprises.
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