WEST AFRICA – International Finance Corporation (IFC), a member of the World Bank, has invested in Uhuru Growth Fund I, a fund managed by Uhuru Investment Partners, a middle-market private equity firm in West Africa.

IFC’s support includes an equity investment of up to US$10 million from IFC’s capital and an additional US$10 million from the Blended Finance Facility of the International Development Association’s Private Sector Window, which helps de-risk investments in low-income countries.

The fund will provide growth capital to the region’s small and medium-sized enterprises (SMEs), including women-led businesses.

The fund invests exclusively in low-income countries, focusing on high-growth companies offering consumer and financial services in Nigeria, Ghana, and Côte d’Ivoire. The fund will also invest in businesses in Senegal, Mali and Burkina Faso.

At least 25% of the companies the fund invests in will be owned or led by women.

IFC will work with the fund to develop and implement environmental and social standards and improve gender diversity at the fund and the companies it invests in.

In addition to providing equity capital, Uhuru will help companies improve operations, secure banking relationships, and expand domestically, as well as across the region’s Anglophone and Francophone economies.

“IFC’s support has been crucial for a first-time fund like ours to reach our fundraising target in a challenging environment,” said Yemi Osindero, Managing Partner of Uhuru.

“Entrepreneurs in our markets need partners that understand their challenges and can provide not just the capital, but the support to enable their businesses to thrive, be impactful and ultimately succeed.

“We look forward to partnering with passionate local entrepreneurs to grow their business and to creating sustainable value for our investors and all other stakeholders.”

IFC’s investment in Uhuru could demonstrate that investing in underdeveloped private markets like West Africa, often perceived as higher risk, can generate returns to investors with sufficient deal flow and exit potential. West Africa has a large, young population, rapid urbanization, and relative currency stability.

“SMEs are essential to economic growth, job creation, and poverty reduction,” said Kevin Njiraini, IFC’s Director for Southern Africa and Nigeria.

“Private equity financing can help smaller businesses grow into bigger regional players. By investing in Uhuru, we will enable more small businesses in Nigeria, and West Africa more broadly, to access much-needed growth capital to recover from the COVID-19 pandemic, offer innovative products, and support the region’s economic development.”

Early 2021, The Uhuru Investment Partners (Uhuru) announced the first close of Uhuru Growth Fund I (UGF) at US$113 million with capital support from the CDC Group, the UK’s development finance institution (DFI), along with other DFI partners, commercial and Impact Investors.

In addition to CDC, UGF is backed by commercial investors AfricaGrow and Kuramo Capital, in addition to DFIs including European Investment Bank, DEG, SIFEM and Finnfund.

Commitment from Uhuru’s partners was to provide the vital capital to support local businesses’ economic revival from the COVID-19 pandemic and boost trade across the continent.

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