Dedicated fund for SME expansion
A specialist fund management company, Business Partners International (BPI), launched a N$100 million Business Partners International Namibia SME Fund which started operations last year in October, to cater to small and medium enterprises (SMEs).
At the official launch in Windhoek on Wednesday, Eloise du Plessis, Country Manager of Business Partners International Namibia said the fund was launched in response to the growing demand for access to finance and technical assistance, and she was confident that the fund will be able to offer local entrepreneurs and businesses exactly that.
“Access to finance remains an issue for many SMEs due to local financial institutions’ hesitancy to take on additional risk, and the limitation placed on businesses applying for finance due to the level of securitisation required.
In response to the growing need for risk capital and quality technical assistance in Namibia, BPI has a specific mandate to operate exclusively in the SME space and to invest both capital and knowledge in the entrepreneur and business,” she explained.
She said the fund will be managed by a local investment team from a regional office in Windhoek and the focus of the fund will be to provide access to funding and post-investment technical support for SMEs, to stimulate wealth creation and foster local entrepreneurship.
“The fund will be diverse in its investment selection within the SME space and investment amounts will range from sector to sector,” she added.
Du Plessis pointed out that, “the profile of SMEs that Business Partners finances is the formal, regulated existing companies that are seeking expansion capital and to fund growth opportunities. Business Partners’ financing and investment options range from N$500,000 to N$10 million, with the average investment at N$3 million. Early stage companies that fit the above profile and have a strong business case backed by a seasoned entrepreneur may also be considered from time to time.”
She said that certain industries that the fund would not cover include on-lending activities, farming (primary agriculture), underground mining, informal or micro enterprise, non-profit organisations and sin activities like gambling, alcohol and tobacco, due to the technicalities and unpredictable nature of the activities.
Said, Nazeem Martin, Managing Director of Business Partners Limited, also present at the launch, “Namibia was an attractive choice for the business to establish itself due to the fact that the country shares many similarities with the South African SME environment.”
“Besides the country performing relatively well economically, the regulatory environment is similar to South Africa, which means we can relate to the business practices and culture in the country,” he added. Currently the key investors of the fund include the International Finance Corporation (IFC); Dutch impact investor, Stichting Doen; the French development agency, Proparco; the Dutch development agency, FMO and the African Development Bank (AfDB).