Investment Profile

Investisseurs and Partenaires pour le Développement Ltd.

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Investment size:  $2.2M
Theme Small and Medium Business Development
Type Indirect
Geography Africa
Date 2018

Theory of Change

SEDF’s $2 million investment into the €21.3 million Investisseurs et Partenaires Development 2 Fund (IPDEV 2) provides tailored financing and technical assistance to local fund managers in Sub Saharan Africa supporting the growth of small and medium-sized enterprises (SMEs). IPDEV 2 is a “fund of funds”, which is seeding ten national funds in Sub Sahara countries with high levels of poverty, unemployment, and low agricultural productivity. These National Funds bridge the gap for small businesses that are excluded from traditional capital markets. IPDEV’s investee companies create jobs and support the economic development of low-income people and smallholder farmers. Through IPDEV 2, SEDF has helped to seed and expand the local impact investment sector in West Africa.

Challenge and Context

By 2050, Africa is expected to see 450 million people enter the job market, while at current pace only 220 million jobs are likely to be available. Accelerating job creation requires a focus on start-ups and SMEs: this is key to ensuring the sustainable development and political stability of the Continent.  

Most African SMEs are still at an early growth stage and require between $50,000 and $500,000 in funding to mature. Very few investors, however, are providing the financing and technical support needed to help these businesses advance. 

Description

Founded in 2002, Investisseurs et Partenaires finances SMEs and startups in Sub-Saharan Africa. IPDEV 2 is a €21.3M fund of funds that seeks to both capitalize local African fund managers and directly enhance employment across the region.  

Expectted Outcomes

IPDEV 2 seeks to strengthen the impact investment field primarily in West Africa by fostering a community of local investment teams equipped with industry best practice know-how who will eventually operate independently of IPDEV 2. It aims to:  

  • Launch / support 10 African impact investment funds. 
  • Provide training and skills transfer to 50 staff across the ten national impact funds.
  • Provide training and advisory support to 550 SMEs.  
  • Create 14,000 direct jobs.  
  • Improve the lives and livelihoods of primarily low-income smallholder farmers by funding agricultural SMEs and providing training to improve productivity.
  • Allocate 20-25% of capital to women-led and women-owned SMEs .

IPDEV 2 expects that investments made in the ten national funds will leverage 5x their capital by raising funds from local corporates and high-net-worth-individuals.  


Why SEDF?

SEDF’s investment in IPDEV 2 supports Open Society’s commitment to developing platforms that strengthen the field of impact investment, employment generation, economic development, and gender inclusion in Africa.