SMEs in Somalia to tap into a $10m investment fund
Small and Medium Enterprises (SMEs) in Somalia will now have access to seed capital to jumpstart their businesses thanks to a newly launched $10 million fund.
The Norwegian equity company Norfund together with together with Shuraako, a program of One Earth Future, and the Danish development finance institution, IFU Monday launched the Nordic Horn of Africa Opportunities Fund to support small and medium-sized companies in Somalia.
According to a statement Monday, Norfund which is owned by the Norwegian Government will be the lead initiator of the fund injecting an initial $5million while the Norwegian Ministry of Foreign Affairs is contributing $3m.
In addition, IFU and the Arsenault Family Foundation have committed $2m each. Other partners include the Development Fund (Utviklingsfondet), a Norwegian NGO active in Somalia and with a network of Nordic Somali Diaspora.
“The Nordic Horn of Africa Opportunities Fund is expected to have significant development impact by enabling Somali entrepreneurs to build sustainable businesses, contribute to their country’s economy and tax base, and create a significant number of jobs within their communities,” as a statement from the fund managers read in part.
Norfund Chief Executive Officer Kjell Roland said the fund will be instrumental in boosting small enterprises and contribute significantly in the country’s recovery.
“This is an important investment for Norfund and an example of how it is possible to do sustainable investment in some of the world’s most fragile states,” said Roland. “We believe the fund will have significant development impact in Somalia and also achieve a small yet positive.”
The primary investment instrument will be the Sharia-compliant “Murabaha” and the average deal size will be $250,000. Other partners include the Development Fund (Utviklingsfondet), a Norwegian NGO active in Somalia and with a network of Nordic Somali Diaspora.
The capital will flow to all regions of Somalia into companies in various sectors including but not limited to fisheries, agriculture, light manufacturing, hospitalities and energy, the funders said.
Goobjoog News