Inadequate access to financing is one of the largest obstacles to entrepreneurial success in Africa. Through the Choose Africa initiative, the AFD Group has been increasing its financing and support for Africa’s newly founded micro- and small businesses since 2018. Though the initiative has already been highly successful, Proparco wants to go further to meet entrepreneurs’ needs more effectively, particularly early-on as they move from the idea stage to the growth stage. With this new step forward, Choose Africa will be providing fledgling African small businesses a continuum of financing offers spanning all stages in their development:
– In the seed stage, Proparco will develop synergies with Digital Africa by providing the latter with enhanced capabilities, particularly for funding small-ticket ventures.
– In the subsequent stages, Proparco will continue to invest in startups to assist them as they scale up and grow their business.
A total of €130 million will be committed between 2022 and 2025 to support Africa’s digital startups — twice as much as the €65 million announced by President Macron in 2018 and already committed by the AFD Group.
“Proparco is expanding and enhancing its capacity to assist early-stage African startups. In doing so, we are continuing with our drive to support Africa’s small businesses, as President Emmanuel Macron called for in Ouagadougou. The synergies that will emerge from the tie-up between Proparco and Digital Africa will enable us to offer financing and assistance tailored to the various early stages for startups. Our collaboration will amplify the success of Choose Africa and its impact on job creation and economic development,” stated Grégory Clemente, the Chief Executive Officer of Proparco.
“2020 saw the launch of Bridge by Digital Africa, a fund developed by Digital Africa and run by Proparco to help organizations in the digital economy to sustain their growth through the post-Covid economic downturn,” added Stéphan-Eloïse Gras, Digital Africa’s Executive Director. “The success of the programme led us to consider a closer partnership to assist innovative companies through their different development stages. By combining Proparco’s financial expertise with Digital Africa’s ability to source high-potential market solutions and nurture talent, we are creating a powerful tool for furthering digital innovation ‘made in Africa’.”
CHOOSE AFRICA: THE KEY FIGURES
Taking its cue from President Emmanuel Macron’s 2017 speech in Ouagadougou, the French initiative Choose Africa finances and assists micro- and small startups in Africa. Since 2018, the AFD Group has been stepping up its involvement, drawing on the full range of its tools to support entrepreneurial Africa — a crucial driver of job creation and access to essential goods and services.
• The institution has committed €2.5 billion to date, including more than €600 million as part of the new Resilience component launched in response to the Covid-19 pandemic.
• This financing has been granted in the form of loans, investments, guarantees and technical assistance to over 200 partners — banks, investment funds, microfinance institutions and more — in order to assist more than 26,000 micro- and small startups, as well as tens of thousands of micro-entrepreneurs.
• Over the next five years, this will result in the direct or indirect creation or continuation of 1.5 million jobs.
A COMMUNITY DESIGNED BY AND FOR AFRICAN ENTREPRENEURS
Proparco, an organization that has built up expertise and a client portfolio over the past 40 years in Africa, now wants to enable the clients in its network to benefit more broadly and consistently from its intellectual output and support tools.
To further enrich the Choose Africa offer, Proparco therefore plans to establish a network of communities of African private-sector organizations to achieve the following:
o Institute dialogue and sharing among the micro- and small businesses targeted
o Link up those businesses with international investors
o Strengthen the ties between African organizations and the French ecosystem
The aim is to get people in Africa’s private sector to engage in dialogue and build communities designed by and for African entrepreneurs.
Proparco has accordingly initiated a survey of over 150 entrepreneurs participating in the Summit so as to identify needs on the ground. Some thirty of them have met to define the primary features of such a community, based on the expectations that have surfaced. They have also prototyped solutions likely to meet entrepreneurs’ networking expectations, improve the sharing of knowledge and information and strengthen cooperation with French partners operating in Africa.