Kinshasa, DRC, February 4, 2016— IFC,
a member of the World Bank Group, today announced the first close of the
$45 million African Rivers Fund, which will invest in small and medium
enterprises in Central Africa, supporting local businesses in some
of Africa’s most fragile countries. IFC’s SME Ventures Program, which
supports entrepreneurs in emerging markets, contributed $10 million to
the African Rivers Fund.
The fund will target growing, well-managed SMEs in Burundi, Central African
Republic, Democratic Republic of Congo, Republic of Congo, and Uganda.
The fund will be managed by XSML, an investment fund manager based in the
Netherlands and Kinshasa.
African Rivers Fund is XSML’s follow on fund to Central Africa SME Fund,
which supports SMEs in DRC and the Central African Republic. IFC was also
the anchor investor in the Central Africa SME Fund, which invested in 32
small businesses that provide a range of services from medical care to
education to river cargo transport.
Marcel Posthuma, Managing Partner at XSML said: “The successful close
of our second fund, the African Rivers Fund, demonstrates the continued
interest and commitment from our investors in frontier markets like DRC.
The private sector in Central Africa has tremendous growth potential and
long term capital is scarce. Our funds invest in private companies in Central
Africa, creating jobs and supporting the growth of the economy.”
Along with investments, the African Rivers Fund will also provide technical
assistance to its portfolio companies on issues including corporate governance,
raising environmental and social performance, and management skills.
Oumar Seydi, IFC Director for Eastern and Southern Africa said, “Local
entrepreneurs are the key to unlocking economic development in Africa.
Young, growing businesses require risk capital from funding sources that
have a higher risk tolerance than traditional banks. The needs for such
funding is particularly important in post-conflict and other frontier markets.
IFC’s SME Ventures program addresses this need, and XSML is well-positioned
to expand its support to entrepreneurs and enter new markets.”
Under the SME Ventures model fund managers select, invest in and monitor
new businesses. Once the local businesses increase revenues and are set
on a stable growth path, the fund can exit, providing a financial return
to the managers and their investors.
The African Rivers Fund is one of the five global private equity funds
backed by IFC’s SME Ventures program. The fund’s other investors include
FMO (the Dutch development bank), Lundin Foundation, the Belgian Investment
Company for Developing countries, the UK-based CDC Group, Dutch Good Growth
Fund, and FISEA, a fund held by the Agence Française de Développement Group
and managed by PROPARCO.
IFC, a member of the World Bank Group, is the largest global development
institution focused on the private sector in emerging markets. Working
with more than 2,000 businesses worldwide, we use our capital, expertise,
and influence, to create opportunity where it’s needed most. In FY15,
our long-term investments in developing countries rose to nearly $18 billion,
helping the private sector play an essential role in the global effort
to end extreme poverty and boost shared prosperity. For more information,
XSML is an independent private equity fund manager, founded in 2008, with
a focus on frontier markets in Africa. While building and managing funds
for these markets, XSML, eXtra Small Medium Large, aims to help grow small
businesses into medium and large enterprises. The managing partners have
an extensive background in emerging and frontier markets in the areas of
asset management, corporate and development banking and corporate restructuring.
Demand for finance from small and medium sized enterprises (SMEs) remains
largely untapped despite increased interest in frontier markets from international
investors; XSML bridges this gap between international investors and SMEs
in these markets. XSML has a dedicated team of more than 12 investment
and operating professionals across offices in Kinshasa, DRC; Bangui, CAR;
and a soon to be opened office in Kampala, Uganda.