Overview
The Enterprise Financing Facility (EFF) targets to redefine financial support for growth-stage SMEs and innovative startups. As a USD 100 million blended finance facility, the EFF will host diverse capital sources, spanning the public sector, development partners, and the private sector, including individual investors, commercial banks, and financial and non-financial institutions. The fund model has been designed by I&P Conseil and Renew Capital and the proposed two-layer funding structure has been approved by the advisory board at the end of Nov 2023. The fund is designed to deploy capital through direct investment and a Fund of Fund structure.
The EFF’s innovation extends to its suite of financial products and services, meticulously designed to cater to the multifaceted financing needs of growth-stage SMEs and disruptive startups while balancing the risk profiles of
contributing investors. The EFF aims to hire a dedicated fund manager in the first quarter of 2024 to guide it toward its mission of financial empowerment and target to deploy its first direct investments in the second half of 2024 while
continuously fundraising. As EFF targets to be catalytic force to develop the Ethiopian capital market operation through its FOF model it will provide TA support to strengthen new and existing fund managers to become investment
ready by the fund and ensure the success of an efficient capital deployment.
Once set up EFF will be an ideal investment facility for the public sector (Ethiopian government), international donors, Development finance institutions (DFIs) and private investment funds to deploy financing targeting the Ethiopian SME and startups though direct investments in the companies or indirectly by investing in new and existing fund managers that will diversify the investment opportunity as well as catalyze the development of the Ethiopian private capital market
IFL is in the process of accepting an Expression of Interest to onboard a professional fund management firm to set up and manage the fund
Through its FOF structure EFF targets to invest in new and existing fund managers that target Ethiopian SMEs and startups with diverse or specialized focus of sectors and stages. The Technical Assistance arm of EFF will provide TA support to develop the capacity and performance of the identified fund managers.
Through its direct financing structure EFF targets to invest in a diversified pool of growth-oriented SMEs and potentially disruptive startups.