​Swedfund is strengthening its support for small and medium-sized businesses in East and West Africa

Sweden’s Development finance institution Swedfund has invested USD 10 million in each of the funds Advanced Finance & Investment Group (AFIG) Fund II and Catalyst Fund II. These funds, established in the expansive regions of West and East Africa, enable us to contribute to continued growth in small and medium-sized businesses, which are essential for increased job creation.

According to the IFC, the majority of formal jobs in emerging markets are in small and medium-sized enterprises (SMEs). They account for 4 out of 5 new job opportunities and contribute up to 33% of GDP. However, the lack of access to financing in emerging economies is one of the main factors restricting growth opportunities for SMEs. Swedfund is therefore financing banks and funds on underfunded markets to allow them to increase their financing for businesses and entrepreneurs.

AFIG is an established private equity management company focused on markets in West and Central Africa. Its second fund, AFIG Fund II, will principally offer expansion capital for established local entrepreneurs with the aim of developing them into competitive regional businesses. Investing in companies that expand into neighbouring countries supports regional integration. The growth of these businesses will create new jobs and also strengthen the economic ecosystem.

Catalyst Principal Partners was founded in 2009 in Nairobi, Kenya. Swedfund has invested in their second fund, Catalyst Fund II. The fund manager’s strategy is to develop portfolio businesses through active ownership. The focus of their second fund is on growth and expansion capital for businesses in the mid-segment in East Africa.

“We’re pleased to have the opportunity to support two established and experienced fund managers in Africa’s most expansive regions. This allows us to help necessary growth capital reach those vital small and medium-sized businesses. These companies play a key role in creating formal job opportunities and inclusive growth, which is crucial in reducing poverty,” said Swedfund CEO Gerth Svensson.