Business Partners International (Proprietary) Limited

active

_x000C_The proposed project is to establish a fund management operation, Business Partners International (BPI or the company), as the basis for expanding the Business Partners SME financing model to other Sub-Saharan African countries. The project is designed to support IFC’s strategy to develop financing vehicles capable of providing funding and technical support to SMEs on commercial terms and in a sustainable manner. Although the SME sector is the engine of economic development in most countries, funding SMEs in the developing world has suffered from three main obstacles: - because of the absence or under-development of real property rights or ownership in many developing countries, it is difficult for borrowers to provide collateral against loans and even more difficult for banks to enforce claims over the collateral; - since most SMEs are lifestyle businesses and small in scale, there is limited upside potential for the equity investor; and - the small size of SMEs means that the costs associated with identifying, processing and monitoring an investment are very high relative to the size of the investment, making most SMEs unattractive for investors. The project will overcome these obstacles by using quasi-equity instruments that do not necessarily require full collateralization and by using efficient processing and monitoring systems that will improve cost efficiencies. The project is also designed to support IFC’s development of the SME Solutions Center (SSC) network across Africa. BPI fund management companies in Africa will be co-located within the SSCs to maximize synergies in developing deal flow and providing technical assistance services. It is expected that initially BPI will establish 3 pilot-phase single-country funds in each of Madagascar (€8.5 million or equivalent of $10.0 million), Kenya ($15 million) and a third country in Sub-Saharan Africa to be determined ($10 million) to provide local currency financing for SMEs and to manage a technical assistance facility that will provide technical support and advice to investee companies in each country.