Emmanuel Macron, the President of the Republic of France has announced efforts to support the revolution of entrepreneurship and innovation in Africa through a new initiative dubbed Choose Africa.
Choose Africa will be coordinated by the AFD Group and Proparco will devote 2.5 billion euros to financing and support of African start-ups, VSEs and SMEs by 2022. AFD and its subsidiary dedicated to the private sector Proparco will be mobilized to support nearly 10,000 companies at different stages of their development.
Start-ups, small and medium-sized enterprises play a key role in job creation, economic growth and innovation. In Africa, these companies will have a fundamental role to play in welcoming the 450 million young people who will join the labor market by 2050.
The lack of adequate financing remains a major obstacle, which hinders entrepreneurs’ ambition and limits the potential of their companies. Today, only 20% of SMEs in Africa have access to bank loans and 87% of start-ups have no access to financing.
The Choose Africa initiative launched today will devote 2.5 billion euros to financing and supporting African start-ups, VSEs and SMEs by 2022. Driven by the AFD Group, this initiative mobilizes all the tools AFD and Proparco to provide unparalleled support to African businesses.
1 billion euros will be invested in equity in start-ups, small businesses and SMEs in Africa while EUR 1.5 billion will be used to facilitate access to credit for small and medium-sized enterprises via public or private local financial institutions (microfinance institutions, banks, leasing companies, etc.).
In total, nearly 10,000 African small and medium-sized enterprises will benefit from Choose Africa , including 600 through equity investments. Through this initiative, France, via AFD and Proparco, reaffirms its commitment alongside African entrepreneurs and at the service of the continent’s economic development.
Choose Africa through AFD Group will offer both equity investments and tools facilitating access to credit for SMEs (through credit lines dedicated to SMEs, granted to African financial institutions, or via guarantees granted to banks to cover SME risk);
It will also offer technical support to financial institutions in their support activities for SMEs, to train companies and entrepreneurs to improve their environmental, social or governance practices, and finally to develop accelerator and incubation networks local ecosystem support actions to develop an enabling environment for entrepreneurship and SMEs.