Syntaxis Capital Africa has launched a N12 billion private equity fund in collaboration with Afrinvest Asset Management Limited to support Small and Medium Scale Enterprises (SMEs) in Nigeria. The funds will be injected into projects across different sectors of the economy. These include healthcare, manufacturing, education, financial services and agri-processing.
The role of SMEs in the economic development of a country cannot be overemphasized. According to the Ministry of Industry, Trade and Investments, SMEs create 84 percent of employment in Nigeria. However, the inability of SMEs to blossom into efficiently managed, profit-making businesses stems from their incapacity to navigate through the web of challenges peculiar to the sector.
Access to finance is unsurprisingly the most popular for their poor showing, but the infrastructure deficit, scarce mentorship, stereotypes and varying levels of education contribute heavily to their stagnation. Thus, this partnership is a welcome development that could help to address the funding needs of many SMEs in sub-Saharan Africa.
Managing Director of Syntaxis Capital, Adesuwa Okunbo explained that the fund is like a vehicle for rapid economic growth and development.“By providing access to capital to SMEs, we are giving businesses the power to scale their activities, which will, in turn, increase productivity, create new jobs, and generate taxes for the government,” she said.
“In addition, the fund has a unique focus on supporting women-owned or managed businesses in order to improve the ratio of women in the workforce and enhance the standard of living across board.”
Still speaking on the benefits of the fund, the Managing Director of Afrinvest, Ola Belgore said the fund has been constructed as a “portfolio of cash-generative African private equity investments diversified by sector and geography.”
“Qualified investors can, therefore, expect high level of contractual income combined with significant minority equity stakes, superior risk-adjusted returns, strong equity upside, and capital preservation,” Belgore added.
Syntaxis Capital Africa, which is the sponsor of the fund, is a leading provider of growth capital to mid and lower mid-market in sub-Saharan Africa. The company also has a 30-year record of successfully managing private equity funds. Afrinvest Asset Management Limited, on the other hand, is a leading independent investment manager in Nigeria will be tasked with managing the funds of the project.
