A Regional Investment Fund for micro, small and medium enterprises in Sub-Saharan Africa (REGMIFA) was launched on 5th May 2010 in Berlin. Symbiotics Investment Manager SA, a Geneva-based management company specialized in microfinance, was selected to manage this new fund.
Created by the German Federal Ministry for Economic Cooperation and Development (BMZ) and the development bank KFW, the REGMIFA will be given a budget of $ 150 million. The fund is meant to meet the financing needs of African financial intermediaries who provide loans to micro, small and medium enterprises in Africa.
The REGMIFA: a fund of support for the African microfinance institutions
Inspired by a G8’s initiative to improve access to finance on the African content and developed by leading financial institutions, the REGMIFA aims to develop a loan portfolio of $ 200 million dollars by 2014. For the first time, a fund will provide African microfinance institutions with a wide range of financial instruments. These include equity, direct lending and technical assistance to microfinance institutions (MFIs), local banks and other financial institutions which provide funding for very small, small and medium enterprises (MSMEs) in Sub-Saharan Africa.
A fund to fight against poverty
The funds will go to fifty African microfinance institutions and will indirectly support more than 300,000 businesses in the next five years. Loans in local currency available, the involvement of a large number of investors and the private sector will therefore allow African businesses to expand, create jobs and fight against poverty in the years to come. Eventually, 500,000 jobs should be created with this fund.
The REGMIFA’s great interest is to eliminate currency risk for borrowers and clients and to reduce the cost of their loan. The loans will essentially go to women and are meant to improve their social status and their role of entrepreneurs.
Donors of REGMIFA
Among the many investment funds, the European Investment Bank (EIB) has already pledged to invest 15 million euro. The Bank will also provide a grant of $ 2 million for technical assistance in this initiative and will play a key role in the choice of fund management specialists.
In addition to the EIB, the fund's investors are the German Federal Ministry for Economic Cooperation and Development (BMZ), KFW Development Bank, the Spanish Foreign Ministry (MAEC), The Spanish Agency for International Development and Cooperation (AECI), the Official Credit Institute (ICO), IFC (a member of the World Bank group), the Belgian Investment Company for developing countries, the Development Bank of the Netherlands (FMO), the Austrian Development Bank (EPO), the European Commission/EuropeAid, the French Development Agency (AFD), the Promotion and Participation for Economic Cooperation (Proparco), the Norwegian Initiative for Microfinance (NMI) and the African Development Bank (ADB).
