The participation of SMEs, who account for over 80 % of Africa’s employment, remains negligible in the economy, primarily due to limited access to significant resources required to finance necessary infrastructure, equipment and operations. This scenario stifles economic diversification and equitable growth, thus perpetuating negative social consequences such as poverty, illegal migration and trade, human trafficking and so on. The most common and persistent financing obstacles for SADC SMEs are:

  • Lack of medium to long-term finance for start-ups and expansions;
  • Inappropriate terms and conditions for short-term credit or trade finance;
  • Insufficient financing and other instruments to support the SME sector;
  • Low capitalisation and lack of collateral; and
  • Poor record keeping and/or financial management.

 

At BFS, we understand that SADC SMEs’ financing challenges are not a consequence of lack of capital on the market, but rather, the unavailability of appropriate growth capital. Most high growth oriented SMEs are operating in survival mode due to the lack of corresponding balance sheets, infrastructure and historical financial performance required to access traditional commercial debt.  We also recognise the fact that enterprise financing needs vary at different development stages, and require alternative dynamic funding types. As such, BFS believes in the provision of sustainable financing solutions which is a collective effort.

Over the years, the Southern Africa Development Community (SADC) member states have adopted initiatives to liberalise the financial and capital markets, including investment services in the region. However, on the whole, these reforms have not been as effective and local SMEs continue to suffer from lack of access to growth finance.  Africa’s USD 5.6 trillion market opportunity is currently dominated by a few large corporations, with most crowding out markets in categories that could easily and more cheaply be produced and supplied by local SMEs.

At BFS, we understand that, the problem in SADC is not so much the availability of debt or micro finance in the region, but more accurately, the poor underdeveloped offering of flexible financing products that are suited for the needs of SME growth.

If you are a potential investor and wish to get access to the investment documents, please contact us on the details provided.

BFS Fund Manager is seeking NAD 2 billion  (USD 160 million) to invest in  the SADC SME Focused Venture Capital Fund with the aim to acquire meaningful equity stakes (15 – 49%) in transactions  that promote inclusive growth.

BFS Fund Manager is seeking equity and debt investments to the value of NAD 2 billion (USD 160 million) into the Africa Procurement Fund, a bridging finance fund.