What Has DGGF Accomplished in 2016?
The Dutch Good Growth Fund (DGGF) track ‘financing local SMEs through investment funds’, which Triple Jump manages for the Dutch Ministry of Foreign Affairs, increased to EUR 270M during 2016. The fund aims to address the finance gap that exists for “missing middle” businesses in Africa, Asia, Latin America and Eastern Europe, and has special attention for investing in fragile states, innovative initiatives, and for young and female entrepreneurs. With eight new investments, the amount committed reached USD 105M by the end of the year.
In 2016, DGGF realized an investment in African Rivers Fund (ARF) in Central Africa, the only SME fund that provides risk capital to sustainable growing and early stage SMEs in some of the most underserved markets such as the Democratic Republic of Congo, Congo Brazzaville, and Uganda. ARF differentiates itself with its focus on mezzanine financing in combination with hands-on business advisory. In West Africa, DGGF supports Oasis West Africa Fund, which focuses on SMEs in sectors like education, health, housing and consumption in Ghana and Ivory Coast. Furthermore, DGGF agreed on providing a senior loan to Kinyeti, a financial institution in South Sudan.
In Eastern Europe, DGGF committed funding to two financial institutions in Armenia and Moldova. Both countries suffered from a recent economic recession and local currency devaluation. The DGGF provides much needed local currency funding to finance underserved SMEs. SEF Armenia has a broad rural presence and focuses on lending to small businesses and rural farmers. Total Leasing Moldova’s product range consists of business loans and leasing of vehicles and equipment. The SME portfolio is well diversified across different sectors and across all regions of Moldova.
In September, an investment from DGGF resulted in the launch of GroFin Nomou Jordan Fund, which was celebrated at the Dutch Embassy in Jordan. GroFin Jordan specializes in financing and supporting small and growing businesses that are facing difficulties in securing loans from banks and private equity funds. GroFin Jordan will focus on locally owned and managed enterprises from different sectors (e.g. agriculture, health, education, energy).
In Latin America, DGGF backed CIDRE (Centro de Investigación y Desarrollo Rural), one of the few NGOs providing loans to SMEs in Bolivia, particularly active in the more underserved remote rural areas of Bolivia and in the agricultural sector. By providing CIDRE a loan convertible into capital, DGGF is supporting the institution in its goals to transform into a bank and further develop its services towards SMEs.
Finally, with an investment in InFrontier Afghanistan Fund, DGGF has supported the launch of one of the first private equity funds for SMEs with on the ground presence in Afghanistan, one of the world’s most fragile countries. InFrontier will provide much needed capital to high growth SMEs as well as significant knowledge transfer, considered critical for success in the Afghan context.
For more information: http://english.dggf.nl/