With EUR 15 M and a Big Plan, the EIB Wants to Empower African SMEs Through the IPAE 3 Fund

Across West Africa and Madagascar, small businesses are driving innovation, creating jobs, and shaping the future of their communities. Yet, for many, securing funding remains a major hurdle for small and medium-sized enterprises (SMEs) in West Africa and Madagascar. With over 70% of SMEs lacking sufficient collateral to obtain traditional bank loans, according to the World Bank, access to capital is severely restricted.

High interest rates—ranging from 15% to 30% or even higher—further complicate growth opportunities for these businesses. Without adequate financing, SMEs struggle to scale, limiting job creation and economic expansion across the region.

Recognizing this challenge, the European Investment Bank (EIB) is stepping in with a EUR 15 M (USD 15.7 M) investment in the new I&P Afrique Entrepreneurs 3 (IPAE 3) fund. This initiative, managed by Investisseurs & Partenaires (I&P), is designed to support high-potential local businesses in crucial sectors such as agriculture, health, energy, water, industry, and services.

More than just funding, this high-impact initiative aims to drive sustainable growth, with an estimated 4,000 direct jobs expected to be created—at least 40% of which will be for women. The fund is also part of the 2X Challenge, an international commitment to increasing women’s participation in business, further cementing its role in driving inclusive growth.

Overall, the fund’s primary objective is to empower responsible innovative businesses that tackle Africa’s most pressing challenges, create sustainable jobs, and enhance economic inclusion—especially for women.

Recognizing the need for greater investment in SME financing, the EIB, West African Development Bank (BOAD), and Proparco have stepped in as early investors. This isn’t just a one-time injection of funds—it’s a catalyst to attract additional public and private investors. The EIB’s commitment is expected to unlock additional capital, potentially mobilizing up to 4.5 times its initial investment.

This move is particularly significant in countries where private equity investment has traditionally been limited. With a strong local presence in Côte d’Ivoire, Ghana, Senegal, and Madagascar—alongside coverage in Benin and Togo—I&P is well-positioned to channel funds effectively and create long-term value.

EIB Vice-President Ambroise Fayolle emphasized the broader impact of the investment. “Our goal is to provide start-ups and SMEs with the financial support they need to grow, particularly in regions where access to capital is a major barrier,” he said. “By doing so, we’re fostering responsible entrepreneurship, supporting women-led businesses, and helping to build the business leaders of tomorrow.”

I&P co-CEO Sébastien Boyé echoed this sentiment. “The EIB’s early commitment to IPAE 3 is crucial. It demonstrates confidence in our approach and underscores the urgent need to invest in businesses that offer solutions to Africa’s biggest challenges while promoting economic inclusion,” he said

This new financing represents the fourth collaboration between the EIB and I&P, strengthening a longstanding partnership that has resulted in a total of EUR 35.25 M (USD 37 M) in investments. The initiative is part of Team Europe’s broader commitment to supporting African start-ups and aligns with the EU-Africa Global Gateway program, which promotes sustainable and inclusive growth across the continent.

As a key development player in Africa, the EIB—through its dedicated financing arm, EIB Global—provided nearly EUR 3.1 B (USD 3.25 B) in investment in 2024 for high-impact projects across the region.

By supporting the IPAE 3 fund, the EIB is reinforcing its commitment to financial inclusion, sustainable entrepreneurship, and gender equality in economic growth. This initiative is expected to not only provide much-needed capital but also fosters long-term empowerment and economic resilience in Africa.