SME investment funds – deploying local capital and the challenge of going to scale Key Features of the SME financing case study The Shell Foundation is supporting the sustainable growth of SME’s in Africa via the linked provision of both business development assistance and noncollateralised finance. African SMEs are typically unable to secure commercial finance because local banks are reluctant to take on the ‘risks’
represented by lending to entrepreneurs who lack both business experience and collateral In the last 2 years, in partnership with local banks, we have set up the $5 million Uganda Energy Fund and the $8 million Empowerment through Energy Fund in South Africa. Our banking partners in these initiatives are fully at risk with us.
Results to date:
345 pro-poor enterprises have received business development assistance – of which 170 are now receiving finance and ongoing mentoring.
It is estimated that these two funds have created almost a thousand new jobs plus generated a variety of other pro-poor outcomes Both funds have gained enormously from valueadded and no-cost support from local Shell companies.
Both funds are generating financial returns that are attractive to commercial investors $20 million second stage funds are planned for both with the large majority of capital being provided by local banks Things are further advanced in our SME investment fund programme – called Investment Partnerships – now operating in Uganda and South Africa, and soon to be extended elsewhere in Africa and beyond. The issue – lack of energy access by poor rural households and producers – is the same as in India only more extreme.51 The energy access challenge being explored by Shell Foundation in Africa is also the same as in India: how to catalyse the development of a financially viable SME sector capable of supplying pro-poor energy sources and services.
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Shell Foundation
(Visit Shell's Website)
The Shell Foundation is established to
support efforts to achieve a balance
between economic growth, care for the
environment and equitable social
development - the goal of sustainable
development.
The Foundation's focus on sustainable
development is based upon the Shell
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and prosperity of societies of which it is
part, and its own future, depends on the
ability of all stakeholders, worldwide, to
attain such balance.
However, as one of the most significant
international oil and energy groups, Shell
recognises the global dimension of many
sustainability issues related to its
activities. It believes it has a
responsibility and an opportunity to play
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