FSDH Merchant Bank receives AfDB approval for $25m financing facility to support SMEs
The United States Agency for International Development’s (USAID) Trade Hub, West Africa Trade & Investment Hub, has partnered with an African investment hub, ShEquity, to invest in and support more than 100 high- female-owned potential with a sum of $1.2 million.
The targeted companies will operate in one of six key sectors: agribusiness, healthcare, technology solutions, renewable energy, mobility and fast moving consumer goods.
“Women entrepreneurs are integral to Africa’s success as they operate over 40% of small and medium enterprises on the continent. However, African women entrepreneurs face the hurdle of collectively growing these businesses due to $42 billion less in funding than their male counterparts,” said ShEquity Founder and CEO Pauline Koelbl.
Koelbl added that if Africa is to reach its full economic potential, smart investments for African women entrepreneurs must be dramatically increased. “Lack of finance, combined with insufficient business support, places potential women entrepreneurs and those looking to expand their already successful businesses into a growth deficit or low-income trap, widening the gender gap and reinforcing negative biases,” he said.
The partnership between ShEquity and USAID’s Trade Hub will focus on the challenges facing Africa by providing cash investments, structured technical support, and access to high-value networks.
As for ShEquity, it will generate at least $15 million in private funding which will in turn be used to “invest, grow and accelerate women-owned or women-led businesses operating in Nigeria, Benin, Burkina Faso, Cote d ‘Ivory, Ghana, Mali. , and Niger.
Additionally, through this partnership, ShEquity will provide business development services and technical support to 120 women-owned or women-led businesses in target markets and will also select 12 high-growth, high-impact businesses that will each receive at least 50 $000 in venture capital funding. .
The combined investments in the 12 selected companies are expected to create at least 200 jobs and economically benefit around 20,000 people, directly or indirectly, along their respective value chains, until 2024.
According to Koelbl, ShEquity’s current business portfolio has reached more than 13.5 million people in sub-Saharan Africa.
Koelbl said, “We are excited about the future as we hope to see more action to democratize access to capital and close the gender financing gap in Africa. Supporting women-led funds is the best strategy to close the gender funding gap because of its trickle-down effect: greater diversity in capital allocations translates to more diversity in funded businesses,” he said. he continued.
USAID Trade Hub’s partnership with ShEquity represents its commitment to ensuring that more women in West Africa have access to the financing, resources, and knowledge needed to grow their businesses and accelerate economic development. In the region.
ShEquity has since invested in eight companies in sub-Saharan countries. Since launch, ShEquity has invested as a special purpose vehicle and is currently in the process of formalizing itself into a venture capital fund structure.