Allianz Global Investors in partnership with the KfW Development Bank has established a €170 million “fund of funds” that will ensure venture capital funds and African private equity make investments in SMEs and startups on the African continent.
Managed by Allianz, the KfW fund which got launched on behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ) is referred to as AricaGrow.
It is targeted at financing more than 100 innovative businesses in order to further the course of a sustainable economy and drive social development.
Dr. Joachim Nagel, member of KfW Group’s executive board said the fund is set to help small scale businesses on the continent by helping them solve the lacuna in the financial structure.
“The design and structure of the new AfricaGrow Fund is a milestone in support for the African economy. It is intended to help small and medium-sized enterprises, primarily in reform-oriented African countries, close the existing financing gap and build a solid equity base. In Africa’s economy it is mainly the small, local companies that create the most jobs and thus contributes significantly to securing people’s incomes,”
The “fund of funds” is as a result of the collaboration that exists between private and public partners. Fifty percent of the fund came from the Federal Ministry for Economic Cooperation and Development (BMZ).
€30 million came from the KfW subsidiary DEG, while between €55 million – €70 million came from Allianz companies.
In addition, the Federal Government of Germany is making an available budget in millions for other support initiatives.
Featured Image: Investopedia
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