The Alliance between I&P and USAID is a response to one of the key obstacles facing start-ups and early-stage small and growing businesses (SGBs) in Sub-Saharan Africa: access to seed finance and investment-readiness services
. In the Sahel region, seed financing mechanisms are non-existent Most SGBs face high barriers in access to finance. The SGB support ecosystem is very sparse and currently not tooled to make SGBs investment-ready.
The alliance aims to bridge the gap of investment readiness
for SGBs in the Sahel region with a focus in Niger, Senegal and Burkina Faso. Its main objective is to facilitate access to finance for 52 SGBs in the next three years
. The program will use a combination of seed funding, in the form of small no-interest no-collateral loans, and high-touch coaching by expert investment teams in order to maximize the chances of the SGBs to raise follow-on funding.
USAID’s support will generate a strong leverage effect on African private capital, with the objective to unlock USD 5.6 million
in equity and debt investments from investors, banks and business angels into early-stage businesses requiring individual investments between 40 000 USD and 400 000 USD.
A partnership between I&P and USAID
The partnership is coordinated by Investisseurs & Partenaires (I&P), an impact investing group that has a strong footprint and experience in West Africa, and is implemented by Sinergi Niger, Sinergi Burkina and Teranga Capital, three in-country impact funds sponsored by I&P
. “We have a sound knowledge of the financing challenges for SGBs in the Sahel region and we have a good investment track record. Throughout our investments we have proven that our investment model based on partnerships between international and local financial institutions, business angels as well as corporates has positive development impact.” said Jean-Michel Severino, President of Investisseurs & Partenaires (I&P). Sinergi Niger, Sinergi Burkina
and Teranga Capital
invest in start-ups, early-stage and small growing businesses with a strong growth and impact potential and that have financing needs between 40,000 and 400,000 USD. Together they have already financed 10 SGBs, and thanks to the program they plan to make 20+ new investments in the next 3 years.
The project will support USAID’s development objectives in the target countries by focusing on SGBs with high developmental impact, and in particular by investing in SGBs active in the value chains of agriculture, health, education and essential goods and services.