The European Commission has released €4.2 million through the External Investment Plan to help small businesses in Africa.
The technical assistance programme, to be implemented by the International Finance Corporation, will support local banks in Africa and the European Neighbourhood in developing financial services which will benefit sectors currently experiencing a lack of financing, such as small and medium enterprises (SMEs), young entrepreneurs and women in business; particularly in countries with low income or fragile economies and those affected by conflict. It will deploy investment to sectors in emerging markets, such as agriculture, education and healthcare, which are considered to have a strong relative socioeconomic impact.
The programme will be implemented alongside the €42 million Small Loans and Guarantee Programme, which works to encourage local banks to invest in small businesses, with particular focus on companies owned and operated by women. By providing backing from the EU, an internationally trusted body, both schemes aim to empower African banks to provide investment in businesses which might traditionally have been considered too risky to fund; the technical assistance programme is expected to fund up to 50,000 women-owned small businesses and companies developing green energy options and create up to 200,000 jobs.
Commissioner Neven Mimica signed the agreement to provide support to small businesses in Africa last week in Washington. Commissioner Mimica said: “This new programme worth over €4 million will make a real difference for those who often struggle to access sources of financing for their business ideas: women, young entrepreneurs or small businesses in low-income countries. We expect to support some 50,000 small businesses and help to create up to 200,000 jobs. This technical assistance programme complements the EU guarantee under the European Investment Plan. This is a great example of how our External Investment Plan and our Africa-Europe Alliance for Sustainable Investment and Jobs work in practice.”