Swedfund supports SMEs in Kenya, Uganda and Tanzania
The Swedish Development Finance Institution, Swedfund, lends 10 million EUR to Premier, a financial institution providing credit to private individuals and small and medium-sized enterprises, SMEs, in Kenya, Uganda and Tanzania.
- A growing SME sector is instrumental to reduce poverty in East Africa and access to financing is a major growth constraint for many companies in the region, said Maria Håkansson, CEO, Swedfund. As the first Development Finance Institution providing financing to this well-managed, SME financing specialist Swedfund will make an important contribution to job creation which is a key factor in poverty reduction. Additionally, Swedfund will also have an active role in further developing Premier’s capabilities in sustainability (ESG).
According to the IFC, most formal jobs in emerging markets are created by small and medium-sized enterprises (SMEs). They account for 4 out of 5 new job opportunities and contribute up to 33% of GDP. However, the lack of access to financing in emerging economies is one of the main factors restricting growth opportunities for SMEs. Swedfund is therefore financing banks and funds on underfunded markets to allow them to increase their financing for businesses and entrepreneurs.
As part of the loan agreement, Premier has, among other things, undertaken to develop a group wide Environmental and Social Management System (ESMS), as well as appointing an ES Manager.
Premier Credit was incorporated in 2013 and began operations in 2014 in Kenya. It expanded to Uganda in 2014 and to Tanzania in 2015 with the acquisition of Fanikiwa Tanzania from Gatsby Charitable Trust. Premier is part of the Platcorp group, headquartered in Mauritius, and is a leading provider of SME financing and payroll lending.
Swedfund, owned by the Swedish state, provides risk capital, expertise and financial support for investments in local companies in the developing markets of Africa and Asia. Our mission is to reduce poverty by investing in sustainable businesses, contributing to inclusive economic and environmental development as well as a positive impact to society. Swedfund's investment strategy rests on three main pillars: impact on society, sustainability and financial viability. Since 1979 Swedfund has been engaged as an active, responsible and long-term investor in more than 260 companies worldwide. www.swedfund.se/en