AfricInvest’s Ambitious SME Fund Gains USD 10M Shot in the Arm from Proparco

Small and medium-sized enterprises (SMEs) form the backbone of Africa’s economy, driving job creation and fostering innovation. Yet, despite their importance, many SMEs face persistent challenges in accessing capital and adopting sustainable business practices essential for long-term growth.

In a strategic move to address these issues, AfricInvest, a Pan-African private equity firm and key player in African impact investing, launched its Small Cap Fund to support high-potential SMEs across the continent.

A key milestone in the fund’s development is a recent backing from Proparco, the private sector arm of the Agence Française de Développement (AFD) which recently made a significant EUR 10 M (USD 10.4 M) investment in the fund. This builds on a partnership between the two organizations that spans more than 25 years driven by a shared vision of fostering sustainable growth and economic resilience.

This fund reflects our ambition to strengthen the capacities of African entrepreneurs and respond to economic, social, and environmental challenges in a sustainable manner,” said Jérémie Ceyrac, Proparco’s Investment Director commented on the significance of the collaboration.

With an ambitious fundraising goal of up to EUR 180 M (USD 187 M), the fund will focus on supporting SMEs across North, East, and West Africa, particularly those operating in sectors crucial to the continent’s future, such as agribusiness, healthcare, and education. These businesses not only provide essential goods and services but also have the potential to lead innovation and create meaningful employment opportunities.

“This investment aligns closely with Proparco’s 2023–2027 strategy, which emphasizes promoting sustainable development and supporting African businesses through tailored financial solutions. The initiative also qualifies for the 2X Challenge, a global effort to promote women’s economic empowerment by mobilizing capital for projects focused on gender equity,” Jérémie noted

Brahim El Jai, Senior Partner at AfricInvest, also highlighted the transformative potential of the initiative, stating, “By combining financial support with our local and multi-regional expertise, we are supporting innovation, job creation, and the adoption of climate strategies. Our aim is to help these companies generate measurable economic, social, and environmental value while strengthening their position in strategic markets.”

Beyond financial backing, the Small Cap Fund is designed to help companies adopt inclusive and responsible practices. Gender equality and climate adaptation will be key focal points, with AfricInvest providing guidance to businesses as they integrate sustainable strategies aligned with the Paris Agreements.

So far AfricInvest’s vision has drawn international confidence. The International Finance Corporation (IFC), through its SME Ventures Programme, has proposed an equity investment of up to USD 15 M. The U.S. International Development Finance Corporation (DFC) is also part of the lineup of investors supporting the initiative with a USD 15 M investment. These commitments underscore the growing international confidence in AfricInvest’s ability to identify and support transformative businesses that drive sustainable development.

As AfricInvest continues to secure investments and identify promising SMEs, the Small Cap Fund is positioned to become a powerful catalyst for sustainable growth in Africa. By empowering businesses to embrace responsible practices, AfricInvest, Proparco, and potentially the IFC are shaping a future where economic progress and social impact go hand in hand.