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IFC today announced an equity investment of up to €15 million in Joliba Fund I managed by Abidjan-based private equity firm Joliba Capital to support the growth of small and medium-sized enterprises in Francophone West and Central Africa, one of the most underserved private equity markets in the world.

IFC’s support includes an equity investment of up to €7.5 million from IFC’s SME Ventures program and an additional €7.5 million from the Blended Finance Facility of the International Development Association’s Private Sector Window, which helps de-risk investments in low-income countries. In its first financial close, the fund raised €55 million including from other commercial and development investors such as Proparco, the private sector financing arm of Agence Française de Développement Group; FMO, the Dutch entrepreneurial development bank; and the French private equity firm LBO France. The deal was signed today at the program’s 11th annual forum hosted by IFC and Proparco.

The fund will invest in SMEs in Benin, Burkina Faso, Cameroon, Central African Republic, Chad, Cote d’Ivoire, Mali, Niger, Republic of Congo, Togo, Senegal, and Gabon. At least 80% of the fund’s investment will go to SMEs in countries eligible for IDA, the c for the poorest countries. The region also has some of the fastest growing economies. For example, Cote d’Ivoire is expected to maintain a minimum 6% growth rate for the next five years.

Private equity activity in West and Central Africa remains one of the lowest in the world. Private equity fundraising for regional funds in West Africa, for example, declined to $20 million in 2022 from $234 million in 2018, according to the Global Private Capital Association.

Joliba’s investments will focus on sectors such as consumer products and services, financial services, transport and logistics, agribusiness, business services, health care and education. The fund manager will also provide the SMEs with organizational and operational support, especially in digital transformation and talent management. IFC will work with the fund manager to develop and implement environmental and social standards.

“For a first-time fund managers like us, IFC’s support has been crucial in signaling the viability of investments in Francophone West and Central Africa and help us attract development financing institutions and commercial investors,” said Hamada Touré and Yann Pambou, Co-Founders of Joliba Capital. “We look forward to continuing to work with IFC’s SME Ventures program and helping more SMEs access capital, create value and expand in the region.”

IFC’s SME Ventures program invests in private equity funds focusing on SMEs in underserved private capital markets. Established in 2010, the program has committed $273 million to support SMEs in more than 40 countries, 28 of them IDA and fragile and conflict-affected countries. In all, the program has invested in 24 private equity funds, which in turn has supported more than 520 SMEs and 200,000 full-time jobs, one-third of them held by women.

“Through funds like Joliba and our SME Ventures program, we are helping SMEs – most of them family-owned – improve margins, build brands, and create jobs,” said William Sonneborn, IFC’s Global Director for Disruptive Technologies, Creative Industries, and Funds. “In many cases, especially in countries with nascent private equity ecosystems, IFC is helping create markets as our support help attract other investors with similar interest to create new sources of equity financing for SMEs.”

IFC’s private equity funds strategy focuses on providing growth capital to funds with the highest likelihood of financial and development impact. IFC has committed more than $2 billion to more than 100 funds in Africa.

Photo courtesy of Jim Surkamp.