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IFC Contributes to Investment Fund to Support Small and Medium Businesses in North Africa


In Cairo:
Riham Mustafa
Phone: +20 2 2461 4230
E-mail:
RMustafa@ifc.org

Tunis, Tunisia, June 4, 2013 – IFC, a member of the World Bank Group, has committed to invest in a private equity fund to help small and medium enterprises (SMEs) in North Africa gain access to the finance they need to grow and create jobs.

The €10 million equity investment in Capital North Africa Venture Fund II (CNAV Fund II) will help the fund invest in SMEs across North Africa, particularly medium sized companies that can demonstrate growth potential. CNAV Fund II will not only provide financing, but also advise entrepreneurs and SMEs on best practice. The fund will encourage transparency and good corporate governance, to improve SME competitiveness and sustainability. €75 million has already been committed to the fund, which will have a maximum total of €100 million, and be managed by Capital Invest International.

“Supporting small and medium businesses will positively contribute to the economic growth and stability of the region, as SMEs have strong growth potential that, when realized, will attract more investors,” said Omar Chikhaoui from Capital Invest.

The majority of private equity in emerging markets is growth equity, which depends on the sustained growth of companies to generate profit. Private equity funds can help companies stay focused and negotiate the risks of rapid growth. Globally, the average annual rate of job creation at companies backed by IFC-supported funds since 2000 is 22 percent, compared to regional rates of 2 to 3 percent. But, according to several studies, SMEs in MENA suffer a funding shortfall estimated at $150 billion and the unemployment rate is the highest in the world.

“Investment funds, with their unique provision of both equity capital and expertise, have a significant impact on company growth and job creation,” said Joumana Cobein, IFC Principal Country Officer in Morocco. “Unemployment is a huge challenge for North Africa, and supporting funds can help address this challenge.”

The investment is part of IFC’s strategy in North Africa of facilitating access to finance for SMEs, boosting investor confidence, improving the financial infrastructure, and creating jobs. IFC’s existing committed portfolio in North Africa is $1.6 billion.

About IFC
IFC, a member of the World Bank Group is the largest global development institution focused exclusively on the private sector. We help developing countries achieve sustainable growth by financing investment, mobilizing capital in international financial markets, and providing advisory services to businesses and governments. In FY12, our investments reached an all-time high of more than US$20 billion, leveraging the power of the private sector to create jobs, spark innovation, and tackle the world’s most pressing development challenges. For more information, visit www.ifc.org.

About Capital Invest
Capital Invest International S..r.l is the fund manager which is sponsored by two principal executives of Capital Invest namely Mr. Mehdi Tahiri and Mr. Omar Chikhoui. Capital Invest was formed in 1999 with the objective of creating a first-rate professional private equity fund manager in Morocco. Its shareholders include Argan Partners (management team), Siparax, a French private equity group and CIC Finance, a French banking group.

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