PROPARCO — a Development Financial Institution partly-owned by the French Development Agency and private shareholders — has committed a total of Ksh.283 billion (2.5 billion euro) towards the financing of micro, small and medium enterprises (MSMEs) in East Africa.
The funding to be advanced through a combination of equity, debt and guarantees is targeted at serving close to 10,000 regional enterprises with the aim of scaling up the entities to become regional power players.
A partly Ksh.113 billion (1 billion euro) of the funds will be injected directly into firms with the Ksh. 170 billion (1.5 billion euro) balance being advanced indirectly as credit through partner financial institutions.
“This is the face of entrepreneurship in Africa. We are aware of the country’s many possibilities. Innovations such as M-Pesa have not only created plenty of jobs but have in their wake taken on board so many startups,” French Minister for Europe and Foreign Affairs Jean-Yves Le Drian highlighted East Africa’s SME growth potential.
The French support will extend to beyond just financing to include the professional facilitation of the units which underscores the multiplicity of challenges facing Africa’s largest employment generator.
“The very purpose of this initiative is to have an all inclusive and integrated approach towards the SME ecosystem to include measures such as technical assistance and training in governance to accompany the financial support,” said PROPARCO Regional Head for East Africa Jean-Benoit Du CHALARD.