Enterprise Partners wants to enable investment in small and medium enterprises (SMEs), large enterprises, along with providing them with more credit and equity, to create jobs across various sectors. Through our interventions, we diversify sources of capital for enterprises and help financial institutions build technical capacity to suit a range of markets. We intend to generate £160 million of new investments in different sectors, and 48,000 jobs in SMEs and large enterprises.
Theory of Change
Ethiopia’s private enterprise is sustainably growing at an accelerated pace. Private sector development can be catalyzed through investments and allow Ethiopia to achieve the goals set in the Growth and Transformation Plan (GTP II). However, attracting global investors requires a conducive environment for private equity in Ethiopia. The private equity market in Ethiopia is still at infant stage, making equity investors face a number of challenges including the lack of foreign currency, dealing with a closed financial service sector and other complexities that come with family-owned businesses. Enterprise Partners works to create a vibrant investment advisory market to improve deal facilitation functions, contribute to ease-of-doing business for investors and create awareness of the private equity opportunities in Ethiopia. EP worked with Zemen Bank to provide advisory services on private capital loans to enterprises. In turn, the Bank advisers would educate enterprises about better deal-making. EP identifies specific investment opportunities through our programmes such as the ‘Private Capital Advisory Facility (PCAF)’, which aims to support the investment readiness for businesses and entrepreneurs, and promote the use of investment advisory services.
PCAF Intervention Points
Increase awareness about Private Equity among businesses: Seven workshops on private capital equity have been organized for more than 300 invited businesses/investors, advisory firms and others. In addition, EP designed an intervention called the Investment Linkage Platform, which advocates for the growth of the private equity capital market. EP organized six platforms (speed dating’s and panel discussions) for meet-ups, information exchange and sharing experiences among investors, advisors, brokers and others.
Provide loan/grant for businesses to pay for advisory services: More than 130 businesses applied for the facility out of which 32 applications was approved. Businesses received different types of services such as legal advisory, feasibility & business plan preparation, IFRS, carve out and financial estimates, expansion and strategic document preparations.
Investment dealing between investor and investees: As of today, three companies have signed a Memorandum of Understanding with a total value of USD 76.25 million.
Enterprise Partners is working to tackle the challenge of the lack of access to finance among small and medium enterprises within the country. We have developed interventions that increase access to finance for small and medium enterprises (SMEs), by improving the capacity of lending financial institutions (such as various microfinance institutions, capital goods financing companies, and the Development Bank of Ethiopia) in order to address the needs of the SME market. This is achieved through two large-scale initiatives, the Women’s Entrepreneurship Development Programme (WEDP), and the SME Finance Project (SMEFP). Both initiatives provide technical assistance to financial institutions, in addition to providing large ‘credit lines’ funded by multiple donors, such as the World Bank. As part of SMEFP, we are helping to facilitate lease finance mechanisms – the first of their kind in Ethiopia.
Enterprise Partners is working to increase foreign direct investment in Ethiopia’s’ industrial parks in a number of ways: by enhancing the resource capacity of stakeholders such as the Ethiopian Investment Commission (EIC), by supporting the promotion and development of industrial parks, and by drafting a plan for investment promotion in the country.
Hanna, Meseret, and Lidiya - an investment case study
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