Campaign to increase SME financing launched

A three-year campaign meant to increase financing to small and medium enterprises (SMEs) and build the local financing ecosystems has been launched in Accra.

Dubbed, Catalytic Capital Africa (2CAfrica), the initiative seeks to pool patient and low-cost funds for SMEs to use in unlocking their potential into global giants.

It was launched at the inaugural West Africa Deal Summit to drive catalytic capital to fill the $331 billion Small and Medium Enterprise financing gap in Africa.

The event which brought together over 200 delegates from across West Africa was organised by Impact Investing Ghana (IIGh) and the Nigeria National Advisory Board for Impact Investing (Nigeria NABII) together with impact investing task forces in Burkina Faso and Senegal.

The summit brought together a diverse group of stakeholders, including investors, entrepreneurs, policymakers, and development practitioners from the private sector, development finance institutions, government, and civil society organizations to explore and accelerate innovative approaches to increase catalytic capital for SMEs and to identify investment opportunities with high potential for social and environmental impact.

Visionary leadership

Speaking at the summit, the Board Chair of Impact Investing Ghana, Alex Aseidu, underlined the need for visionary leadership, good governance and patient capital to deliver jobs for Africa’s young people.

He called for delegates to back their commitments with action - financing and practical market-based solutions that can deliver jobs and address some of the pressing social problems Africa faces.

The Board Chair of Nigerian NABII, Mrs Ibukun Awosika, called for honest conversations about why the SME financing gap persists and what has not worked in driving appropriate financing to SMEs.

She said there was the need for more equitable partnerships between foundations, governments, international development and DFIs and other catalytic capital providers on one hand and local ecosystem actors on the other hand to amplify local solutions and ensure sustainability and impact.

Joint statement

In a joint statement at the summit, the participants reiterated their commitment to increasing the flow of catalytic capital in the sub-region to propel growth.

The delegates said they were committed to deploy capital and called on catalytic capital providers to join them in building local financing ecosystems and increasing financing for SMEs.

They launched the three-year Catalytic Capital Africa (2CAfrica) campaign to track commitments and progress.