Investment fund for SMEs launched
Business Financial Solutions (BFS) officially launched the Kula Capital Namibia Impact Fund and Incubation Centre, which aim to empower local entrepreneurship.
The investment fund’s main objectives include; investing funds to achieve a tangible social and/or environmental impact while also generating acceptable long-term returns; contribute to the development of a private equity industry and mentality in the country whilst fostering entrepreneurship and identifying possibilities for turning Portfolio Companies into local, regional and international champions and examine the potential for expanding them regionally, taking advantage of the regional trade benefits.
According to the Chief Investment Officer Equity Investments at BFS, Christina von Doderer the fund is also going to provide growth capital to SMEs that continue to suffer from; lack of access to medium/long-term finance for start-ups and company expansion; inappropriate terms and conditions for short-term credit or trade finance and insufficient financing and other instruments (particularly relating to Working Capital) to support start-ups and SMEs.
The fund will also provide capital to SMEs who struggle in terms of low capitalization and lack of collateral and poor record keeping and/or financial management.
“The fund’s investments will be accompanied by the Fund Manager’s expertise in corporate governance, market and business strategy building and implementation, financial and administrative controls and business best practices as well as access to its wide network, spanning both public and private sectors,” von Doderer said.
Von Doderer noted that their fundraising target is to raise N$150 million or at least one-third thereof, in a first closing either later this year or by January 2020. She added that N$15 million of this is secured by Sanlam Investment Management to date.
The Minister of Industrialization, Trade and SME Development, Tjekero Tweya encouraged start-ups and SMEs to make full use of the Incubation Studio and investment fund as it will enable them to increase their productive capacity and to rapidly increase competitiveness in the domestic, regional and international markets.
“The investment proposition of Kula Capital Namibia represents one of very few pioneering initiatives in the country offering investors the opportunity to champion the creation of an investment fund that will be a growth catalyst for small and medium-sized Namibian start-up enterprises. The fund will be making investment in value-adding sustainable enterprises generating positive returns ranging from below market to market rate while also having a positive social and/or environmental impact,” Tweya said.
Caption: Chief Investment Officer Equity Investments at BFS, Christina von Doderer speaking at the launch in Windhoek on 13 November.