International development finance organisation GroFin has opened applications for its US$100 million fund for small and growing African businesses, inviting startups from Nigeria, Ghana, Zambia, Egypt, South Africa, Kenya, Tanzania, Rwanda and Uganda to apply for investment.
Disrupt Africa reported last month on the launch of the GroFin Small and Growing Businesses (SGB) Fund, which aims to support over 9,800 entrepreneurs and help create 47,000 sustainable jobs over the next five years.
It is expected to grow to US$150 million within two years, with investors including the likes of the Shell Foundation, KfW Development Bank (KfW), the Dutch Good Growth Fund (DGGF) and Norfund.
Applications are now open until December 31 with GroFin saying it is targeting small and growing Businesses that are “grossly underserved” by other funds or financiers. According to the company, it will deliver a unique integrated solution for patient risk capital and end-to-end business support to selected startups.
The fund will make between 80 and 100 investments per year at an average deal size of between US$100,000 and US$1.5 million, typically providing finance in the form of medium term loans.
For-profit businesses with operations in Nigeria, Ghana, Zambia, Egypt, South Africa, Kenya, Tanzania, Rwanda and Uganda are invited to apply, with startups required to have turnover of less than US$15 million and assets less than US$6 million.
GroFin said entrepreneurs in Africa typically lack the vital resources they need to succeed; access to flexible patient capital, access to business skills and training, and linkages to the supply chains of larger organisations.
“In many parts of Africa, SMEs account for over two thirds of GDP and are therefore critical to economic growth and poverty reduction. However many entrepreneurs struggle to access the finance and skills they need to grow their businesses successfully,” said Sam Parker, director at the Shell Foundation.
“With the launch of the GroFin SGB Fund, entrepreneurs across nine countries will be able to access critical ingredients for growth that will also create jobs and support inclusive economic development.”