Any businesses, whether in Africa or not, needs investment supports to give their ventures a longer life. Aside from a business strategic planning, financial sustainability is also one of the most important element of a business. Although there is only a small chance that one will end up bankrupt, let us just be open that the small possibility can really happen. Having something somewhere to run to would at least ease your worries and prevent your investment from sinking.
In Africa, the greatest challenge that one will encounter is the shortage in capital. The region was never recognized in banking industry. This is one factor why growth was hard to achieve. Back then, investors are afraid to invest in Africa because of so many risks, plus, there’s nobody that will back you up in case you felt the need for more funds, even the government is incapable of addressing your need. But now, with rise of many investment opportunities and organizational development throughout the region, together with firm business organizations, all investment in Africa are secured that the life of their business is long and will expand through proper management.
February 2008, the board of directors of The Investment and Support Fund for Businesses in Africa (FISEA) held a meeting to prioritize the growth in the continent through more investments. And in the early part of 2009, they finally come up with a final review. Their first project is the 250 million euro investment fund. This fund will help create over 100,000 jobs in Africa. The limit access to investment is finally resolved. The FISEA fund, as launched by President Sarkozy of Cape Town, is just one of the realizations of the initiative to promote all out development in Africa.
The 250 million euro fund is held by Agence Française de Développement (AFD) and managed by PROPARCO, its private sector investment arm. Fifty percent of the project financed by FISEA will be about taking equity stakes in investment funds. The other half will be for the direct equity investments in businesses. The fund is usable to support businesses in the implementation and supervision of their projects. It will target more unstable and post-crisis regions, small-scale investments and traditionally neglected sectors (agriculture, microfinance, new energies, health, education…). In order for a venture to have an impact on the African economy, it must be financially profitable. Examples are investments on the agricultural production in West Africa, microfinance in Central Africa and SME financing in Southern Africa.
By giving more access to investment funds for investors, there is more room for growth. Africa will prosper because of more companies and employment. This is what FISEA really aims. They are promoting growth by giving businesses access to equity capital and helping them build their capacities. Businessmen can now secure a life for their business. FISEA will provide additional tool for traditional private funds. There will be rooms for growth for both business in Africa and the African economy.
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