Norfund - Investment Funding for SME's

Norfund – the Norwegian Investment Fund for Developing Countries – was established by the Norwegian Parliament in 1997. The organisation is the government’s main instrument for combatting poverty through private sector development and Norfund’s objective is to contribute to sustainable commercial businesses in developing countries. Funding is provided via capital allocations from Norfund’s development assistance budget.

Many countries support development through similar investment funds and Norfund and its international sister organisations are known as Development Finance Institutions (DFIs).
Norfund provides equity, other risk capital, and loans to companies in selected countries and sectors where businesses lack access to sufficient capital to develop and grow. The sectors in which Norfund invests are clean energy, financial institutions and agribusiness, in addition to small and medium sized companies through investment funds.

Our main investment regions are Southern and Eastern Africa, and we have offices in Nairobi, Johannesburg and Maputo. Norfund also invests in selected countries in South-East Asia and Central America via our regional offices in Bangkok and San José.

Norfund always invests jointly with partners, both Norwegian and non-Norwegian. By co-investing with others, we leverage additional capital and can ensure the industrial and local knowledge needed for each investment. Norfund is set up to serve as an instrument for Public Private Partnerships.
All of Norfund’s activities are conducted in accordance with the core principles of Norway’s development cooperation policy.


Norfund is a state-owned company with limited liability, established by a special Act of the Norwegian Parliament. Norfund is owned on behalf of the Norwegian government by the Ministry of Foreign Affairs. The Minister of Foreign Affairs has constitutional responsibility for the organisation and Norfund’s Board of Directors is appointed by the King in Council.
At year-end 2013, Norfund had a portfolio of about USD 1.6 billion (NOK 9.6 billion) and 54 employees.

Investment process
To enter into dialogue with potential partners, Norfund normally requires a well thought-through business idea and business plan. Norfund conducts detailed due diligences on the projects, and requires close co-operation with all partners throughout the investment process.

When investing, Norfund spends considerable resources on understanding the business concept involved and gaining knowledge of how the investment may have a positive as well as a negative impact on its surroundings. Furthermore, we also assess the quality of the partners and their ability to succeed commercially.
Norfund does not expect ‘perfect enterprises’, but we will refrain from financing projects that will lead to irreparable environmental degradation, and from entering into cooperation with partners who demonstrate a lack of willingness to ensure safe and fair labour conditions. Establishing a mutual understanding of the standards that will serve as a basis for the operations and embedding these in a binding agreement between the parties are key steps in this process. Ensuring investment agreements that make room for effective exercise of ownership as a minority shareholder is a further important element.

To find out more about Norfund click here


Genesis Prize Launches Global Innovation Challenge


The Genesis Prize Foundation has officially launched its Genesis Generation Challenge. This global competition is looking for innovative projects to take on the world’s problems. Ideas have to be well-thought through, with potentials for creating measurable changes, and impacts on the intended audience.
Are you passionate about solving a communal or global problem? Have you wondered how you could make your dream job a reality and what you love? The Genesis Generation Challenge is the competition for you. Turn your passion into reality. Be one of the ten winning teams to win $100,000 each, connections to mentors, and opportunities to convene and learn from one another.
The Genesis Generation Challenge is an initiative of the Genesis Prize Foundation in honour of billionaire philanthropist, Michael R. Bloomberg, the inaugural recipient of the $1 million Genesis Prize, who pledged the money would go toward something that would help the world.
WORTH
  • 10 teams would be given up to $100,000 each
  • Benefits exist even for those teams that do not win; they will become part of an active network of forward thinking and connected individuals from whom they can receive feedback and grow their ideas.
ELIGIBILITY
  • The Genesis Generation Challenges welcomes multi-disciplinary teams of young adults to propose big ideas to better the world
  • Each team must consist of approximately 10 individuals and must designate a team leader (age 20-36). Other team members must be 18 years or older
  • Teams may represent nonprofit or for profit entities
  • Your idea must offer a sustainable and scalable solution to an important problem
  • Social entrepreneurs and others with experience delivering projects with lasting and innovative change in their communities and the world are invited to apply
DEADLINE: 28th October, 2014
To apply and for more information visit here

Meet the entrepreneurs of the SME Impact Fund

The SME Impact Fund generates impact by investing in agribusinesses in Africa.

This video shows the story of the African entrepreneur Mr. Leopold. He tells about his business in banana wine, how he got in touch with the SME Impact fund and what his business plan is for the loan.


Are you eligible for USADF funding?


USADF provides funding for the following types of groups:

AGRICULTURAL COOPERATIVES and SMALL-SCALE PRODUCER GROUPS :  An organization formed by a group of small-scale farmers, artisans, or producers to achieve some or all of the advantages of large-scale marketing and production. 

COMMUNITY-BASED ORGANIZATIONS (CBOs):  An organization made up of a group of people who come together to accomplish a common goal or a set of goals tailored to meet the development needs of their community. 

AFRICAN INTERMEDIARY ORGANIZATIONS (AIOs):  An organization that works directly with very low-income people and underserved groups.

SMALL AND MEDIUM-SIZED ENTERPRISES (SMEs): A registered enterprise that employs up to 100 workers, has annual sales revenues up to $500,000, and has a business plan that impacts communities either directly within their enterprise or indirectly through supply-chain linkages. 

The majority of USADF’s funding agreements range between $50,000 and $250,000.  USADF does not provide funding to government agencies, political parties, or organizations that are not based in Africa.  Please note, USADF does not provide funding or scholarships to individuals...continue reading



How to Apply for Your First Business Loan


If you're thinking of applying for a bank loan, forget all the doom and gloom. There's a fundamental principle to remember: banks still want to lend money to viable businesses. If you can demonstrate your business can generate enough profit to prosper and then pay them back, you're good to go. The challenge is to prove you fit the bill:  this can be difficult if you have no track record to point to.
This guide explains the dos and don'ts of applying for a business loan.

Are you ready?

  • Whether you're a start-up or not make sure your business is ready for investment.
  • Ensure you have reached the point where to expand your business - or to get it wholly off the ground -  the logical option is to bring investment in from outside.
  • Don't wait until you're in a bad spot and desperately need finance before you apply: the average lead time is three to six months.

Before you approach the bank

  • Read up on how to write a business plan and how to make cash flow forecasts.
  • Research all of the business fiance options open to you, such as a personal loans, small business grants or private equity.
  • Look into your local SME financing scheme to see if you're eligible.

What to do first

  • Prepare to outline in your pitch exactly how much money you need and how you will spend it. You need to be able todemonstrate how this cash injection will benefit your business.
  • You'll need to present a credible business plan and be able to speak in depth about your business's commercial offering
  • If you feel you need help on your business plan, you might consider consulting a business adviser.
  • Be ready to provide monthly cash flow projections for the next four quarters to demonstrate you can comfortably meet interest and loan payments. Include a 'repayments' figure in your calculations.
  • Know all details regarding the activities of the company: the more you're asking for, the more detail you'll be expected to give
  • Get ready to detail any market research you have carried out
    You have to show the bank that you have great people on your team with the right balance of skills and experience, so get ready to convince the bank you're the real deal.
  • Be energetic and enthusiastic; but be honest too. You can mention weaknesses as well as strengths in your pitch. The bank will need a true picture of your business.
  • Have all documents to hand so that you are able to furnish the bank with up-to-date personal and business financial histories: you'll need to provide an acceptable credit score or personal reference, and to go through your latest accounts, tax returns, assets and liability statements

What to expect

  • There are three questions the bank will ask:
    • How much money you need; i.e. do you need to borrow the full amount or do you have a deposit?
    • Over what length of time do you want to repay your loan?
    • Can you secure the debt against any assets?
  • The answer to these questions will influence whether your application is accepted as well as determining the rate and cost of your interest: so get your figures ready
  • The larger your business loan, the more detail you will have to provide

Types of loan available

  • High street banks, building societies, specialist lenders and internet brokers offer loans tailored to the needs of small businesses. There are two main kinds of small business loan:
    • Flexible loans are tailored to your business needs, and may allow a capped or variable interest rate and a choice of monthly or quarterly repayments
    • Fixed loans have a pre-determined rate of interest and a more rigid repayment structure
  • The interest rate offered on your loan will vary depending on fluctuations of the base rate, on the duration of your loan and on the risk involved. Rates generally range from around 8% to 12%
  • Depending on the size of your loan - small business loans generally range from £1,000 to £25,000 over an average of one to 10 or even 15 years - you may or may not have to provide security.
    • Unsecured loans usually have higher rates of interest and tend to provide smaller sums of money over a short period of time
    • For larger loans, a bank will want to secure the loan against an asset such as a business property, or it will require personal guarantees - on personal homes, for instance - from company directors
    • You can ask to limit the scope and duration of your personal guarantee i.e. you can be released from personal guarantee once cashflow reaches a certain level, or after a set period of time
    • Depending on the asset you are using for security - freehold and long lease property is the most valuable -- the bank will usually lend 50% - 80% of a property's value. Specialist lenders may advance as much as 90%
  • Beyond this, loans are differentiated by size and term
    • Short term loans are usually smaller and repaid within one year
    • Longer term loans are those which take longer than one year to settle - and can take as long as 20 years to mature, like mortgages.
  • Credit cards, lines of credit and letters of credit are also worth considering, depending on your circumstances
  • Remember: sole traders and partners are automatically liable for their company's debts

Be realistic

  • Be prepared to wait a little before your loan is approved: the average lead time is three to six months
  • Don't underestimate how much money you will need. If you need to return to the bank and request further funds, it will be more expensive. It may also affect the lender's confidence in your ability to manage your company finances.
  • Don't over-forecast revenues or under-value the costs you will incur.
  • Be honest about any reasonable living costs you will need to take out of the business.

Do your homework

  • It's a good idea to ask the bank to calculate the total cost of your loan offer, including the total cost of interest and all charges: this will make it easier to compare different offers
  • Be sure to check around and compare different banks and their small business offerings. Your bank may be willing to improve its offer if you have other quotes.
  • Many banks prefer if you have your main account with them, but if you do not hold an account with them it will not necessarily count against you.
  • Check for hidden charges:
    • You can be charged for simply setting up a loan agreement with the bank
    • Ask about late payment charges
    • Redemption penalties can apply if you choose to settle your loan earlier than agreed
    • 'Add on' fees: ask your bank if these could apply to you

Checklist

  • Have you gathered sufficient evidence to prove you can generate profit and make repayments on time?
  • Ensure you can outline what you need money for and how you will pay it back
  • Identify clear routes to market and when you expect to start bringing money in
  • It's crucial you have a contingency plan so you can repay your debts even if things go wrong

AfDB supports SMEs in Africa with a US $12.5 Million



The Board of Directors of the African Development Bank (AfDB) approved on Friday, October 18 a US $12.5-million equity investment in the Kibo Fund II. This contribution will allow the Fund to provide access to finance and capacity building to an underserved market of outward-looking small and medium enterprises (SMEs) and mid-market African firms, particularly in low-income and fragile states within various sectors in Africa, thereby boosting income generation and job creation.
Based in Mauritius, the Kibo Fund II will be managed by Kibo Capital Partners (KCP), an indigenous Mauritian Fund Manager. Kibo Fund II has targeted capital commitments between US $75 million and $80 million to invest in SMEs and mid-market companies, with annual revenues US $10 million to $40 million.
The investments will be diversified across industries and sectors. Moreover, the Fund will promote regional integration by supporting regionally expanding SMEs.
Kibo II will primarily target the Indian Ocean Region, including Madagascar, Mauritius and The Seychelles; the Eastern Africa Region, covering Kenya, Tanzania, Uganda and Rwanda; and the Southern Africa Region covering Zambia, Malawi, Namibia, Botswana, Mozambique, the Democratic Republic of Congo, Angola and Ethiopia.
The main expected development outcomes of this investment will stem from private sector development through alleviation of the financing constraint faced by SMEs, improved governance and business practices for these companies, thereby further job creation and inclusive growth in the region. Moreover, additional benefits will arise from enhanced regional integration through strengthening of the regional operations of an African fund manager.

$14 billion for Africa investment



US companies are planning $14 billion worth of investments in Africa. US President Barack Obama is set to announce the plans during the second day of the US-Africa Leaders Summit.
President Obama is due to announce the investments later Tuesday during the second day of the summit in Washington, D.C., a White House official said.
The $14 billion (10.4 billion euros) investment by US companies will span a range of industries such as construction, clean energy, banking and information technology, the official said.
The news comes one day after the first US-Africa Leaders Summit opened. The forum was established with an aim to boost trade opportunities and forge stronger economic ties between Africa and the US.
Speaking to delegates at the opening of the three-day event, US Secretary of State John Kerry said Africa could be "the marketplace of the future." He said the continent was currently facing an "amazing opportunity." The International Monetary Fund predicts the continent will see growth of 5.8 percent in 2014. It's also home to an expanding middle class and some of the world's fastest-growing economies.
In 2009, China surpassed the US as Africa's biggest trading partner and the US is hoping to do some catching up. While the US remains the largest source of investment on the continent, it has been largely in the oil and gas sector.

South African Companies: Invitation to participate in an Investment and Trade Initiative to Zimbabwe 27 – 31 October 2014

The dti (South Africa) invites South African Companies to apply to participate in an Investment and Trade Initiative to Zimbabwe. The objective of this mission is to increase trade and investment between South Africa and Zimbabwe. It will present an ideal platform for South African companies that would like to export value-added products and services and for companies looking for investment opportunities and joint venture
partnerships in the Zimbabwean market.

The target sectors for this mission include:

  • Agro-processing
  • Infrastructure (rail, road and telecoms)
  • Built environment professionals (consulting engineers, civil engineering contractors, quantity surveying and architects)
  • Energy (oil, gas and renewable energy)
  • Mining and capital equipment
  • Electro-technical (electronics, electrical engineers, ICT and power

Agriculture Fast Track Fund - Burkina Faso, Côte d’Ivoire, Ethiopia, Ghana, Mozambique, Tanzania



The Agriculture Fast Track Fund (“AFT”) builds on previous G8 and G20 commitments by supporting financially sound, environmentally sustainable, and socially beneficial food security projects. As a project preparation facility, the projects the AFT supports form a pipeline of bankable food security projects that support Africa’s agriculture transformation agenda. The AFT provides grant funds for project development costs such as feasibility studies, market research, financial modeling, business plan development, and environmental and social impact studies. The AFT increases the number of investment-ready agriculture infrastructure projects and public-private partnerships by defraying front-end project development costs and risks that commercial developers or other project sponsors are unable to shoulder alone. A modest amount of targeted donor funding can unlock hundreds of millions of dollars in concessional and commercial financing for agriculture infrastructure needs in rural Africa.

 Read more...

Africa Mentorship Program - Touch a life, touch a continent.


Mentor an SME in Africa and help share your skills with the world. At Africa SME Network we believe that mentorship brings dreams to life. Join our Africa Mentorship Program and help end poverty in Africa one entrepreneur at a time.

For more information on how you can be a part of this life changing program:

Send Us an Email on africasmenetwork@gmail.com

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Follow Us on Twitter : @africasmenetwok  

African Women in Business Initiative




The African Women In Business Initiative (AWIB) responds to the AFDB's Private Sector Development Strategy emphasis on the role of women in business as well as to calls to empower women entrepreneurs, in particular SMEs, through better access to finance.
In this respect, the Private Sector and Microfinance Department (OPSM) has developed under the Initiative, integrated financing programs for women’s entrepreneurship development in order to:
  • contribute to a more equitable business environment for women entrepreneurs and enhance their contribution to economic development;
  • develop SME financing instruments and mechanisms to enhance the financial market and assist successful SMEs to grow their enterprises.
The African Women in Business Initiative has a Plan of Action with the following objectives:
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