CDC Group, the UK’s publicly owned impact investor, has announced the commitment of $39.2 million to support SMEs in West Africa.
CDC is backing Verod Fund III and Adiwale Fund I, West-African based private equity funds targeting SMEs in the region, with commitments of $19.2m and $20m respectively, it said in a statement. CDC Group is the world’s first impact investor with over 70 years of experience of successfully supporting the sustainable, long-term growth of businesses in Africa and South Asia. In West Africa, banks and low levels of private equity activity are currently struggling to meet the financing needs of SMEs, hampering their potential as engines of economic growth in the region. Access to finance is cited as the top barrier for doing business in Nigeria and Ghana. Increasing access to capital to this market is a core element of CDC’s Africa strategy by backing well-networked, experienced local teams. Nick O’Donohoe, CEO of CDC Group commented: “In West Africa SMEs should be the engine room of regional economies but they are being held back by the lack of access to finance. As the largest private equity investor in Africa, CDC is committed to boosting access to finance for these businesses. Investing in SMEs enables our capital to go further and we expect that positive returns will generate an important demonstration effect and help mobilise further capital into these markets, encouraging more commitments towards the United Nations Sustainable Development Goals.”
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