This archive report was first published on 25 November 2019.
On November 25, 2019, the German development bank KfW partnered with Allianz Global to launch the AfricaGrow fund, worth $188 million, to finance startups and small and medium-sized enterprises (SMEs) in Africa.
The fund aims to promote sustainable growth and social development in countries associated with the G20 Compact with Africa. It will finance 150 innovative businesses by providing funds through African private equities and venture capital funds.
According to Dr. Joachim Nagel, Member of the Executive Board of KfW, the fund will bridge the finance gap by supporting SMEs in reform-oriented countries. 'The design and structure of the new AfricaGrow Fund is a milestone to support the African economy,' Dr. Nagel said. 'It is intended to help SMEs, primarily in reform-oriented African countries, close the existing financing gap and build a solid equity base.'
The fund will benefit startups with innovative business models, focusing on companies with strong potential, inclined to export and cluster-based growth models. Countries such as Ghana, Guinea, Morocco, Rwanda, Senegal, Togo, and Tunisia will benefit from AfricaGrow.
The fund will come from the German Federal Ministry for Economic Cooperation and Development (BMZ), a subsidiary of the German development bank, and members of the Allianz companies. BMZ will contribute half the funding ($94 million), while DEG, a KfW subsidiary, will give $33 million. Members of the Allianz Group will provide between $61 million to $78 million, and the German Federal government will provide an additional budget to support the initiative.
