Initially set at € 2.5 billion, the “Choose Africa” initiative is scaling up its private sector financing fleet in Africa. Designed by Proparco, a subsidiary of the French Development Agency (AFD), this initiative now brings its participation in the recovery of VSEs and SMEs strongly impacted by the Covid 19 crisis to € 3.5 billion.
“Now increased to 3.5 billion euros, this program also contributes to the collective effort of public development banks towards African SMEs announced at the Common Finance Summit for all those who do Africa the leading continent for entrepreneurship and innovation ”, underlined, AFD Director General Remy Roux
Nearly 10,000 companies are targeted by this operation, including 600 through equity investments. According to AFD studies, only 20% of SMEs in Africa have access to bank loans and 87% of start-ups have no access to any financing. To this worrying situation is added the health crisis which further weakens several companies in Africa.
The first “Choose Africa” funding forecasts were broken down as follows: investment of € 1 billion in equity in start-ups, micro-enterprises and African SMEs; € 1.5 billion intended to facilitate access to credit for small and medium-sized enterprises via local public or private financial institutions (microfinance institutions, banks, leasing companies, etc.). But the reduction in commercial activity induced by the coronavirus has created a slowdown in the African economy, hence this significant contribution of € 1 billion.
