Shell Foundation will address this year's Africa Finance & Investment Forum (AFIF) on the importance of Africa's small and medium enterprise (SME) sector to sustainable economic growth in the continent, and the development of a new asset class to provide a combination of growth capital and business skills to entrepreneurs on an international scale.
The forum, entitled 'Financial Inclusion through SMEs & Cooperatives', is promoted by EMRC and held in partnership with Rabobank at the Rabobank Headquartersin the Netherlands, from 17-19 June 2012.
"Growth in the SME sector is critical to economic development, but entrepreneurs in Africa with limited collateral, track record or business experience lack the finance and vital support to help them expand their businesses," explains Jeroen Blüm, Shell Foundation's deputy director. "The sector is traditionally seen as high risk and associated with high transaction costs putting off the usual providers of capital like banks or private equity firms. It is hugely under-served. But after nearly 12 years trying to tackle this problem we now have evidence that it is possible to deliver these critical inputs to this market in a way that makes financial sense."
Achievements are remarkable
Shell Foundation co-founded GroFin in 2004, an African-based financial intermediary that provides risk capital and tailored business expertise to viable start up or growing businesses. The specialist company now has local offices in nine African countries and has invested $85 million into African SMEs, creating over 6 500 jobs.
"GroFin's achievements are remarkable," adds Blüm. "We've worked closely together from the start, combining all our resources - not just money but also knowledge, skills and networks - to create a totally new model and to overcome the many obstacles that any pioneer in a new market faces in going to scale. Growth Finance is a new and increasingly investable asset class - but Africa needs many types of organisations like GroFin to serve the needs of its entrepreneurs. Although the signs are good, with more organisations entering this space and increasing investor interest, there is still a lot to be done before this can impact the economic development of Africa as a continent."
Finding the right balance and correct financial tools for the sector is essential. This year's AFIF Forum will gather leading global representatives from a variety of sectors to highlight the financial tools, solutions and growing policy trends to ensure economic growth for Africa's SMEs. The discussions and proposals to be highlighted at the forum are essential for a cross section of African sectors to establish their full economic potential.