Investing in Africa

A friend runs a blog called Nubian Cheetah which

seeks to inform those who have an intrinsic interest in Africa’s development with regards to ICT, technology, business, venture capital and social entrepreneurship.

He posts information on investment groups and private enterprises focused on, or based out of, Africa.  Most aren’t particularly focus on ‘development’, but on creating wealth the old fashioned way – by providing services and generating jobs.

Two recent entries caught my eye, and I think I’m going to do some more research on them. 

The first is the Africa Enterprise Challenge Fund (AECF), which is hosted by the Alliance for a Green Revolution in Africa (AGRA).  Quoting from the site,

AGRA is an alliance jointly created in 2006 by The Rockefeller Foundation and the Bill & Melinda Gates Foundation aimed at improving agricultural productivity and small holder farmer well-being throughout sub-Saharan Africa.
…….
The AECF is an AGRA initiative that supports AGRA’s mission. The Board of AGRA provides the governance structure for the AECF and is responsible to the AECF’s donors. However, in practice, the AECF operates as an independent fund reporting to its Investment Committee which in turn reports to AGRA’s Board.

Since AGRA is a rural development foundation, AECF also focuses primarily on

ideas in the fields of agri-business and rural financial services; and information, media and other services related to these sectors.

To qualify for funding a project

should have a positive impact on the rural poor in Africa,deliveringincreased employment, reduced costs, and improved productivity.

The second site is Investors without Borders.  They are part of a growing cadre of investment groups focusing on ’small-to-medium-enterprises’ (SMEs).  Because of the traditional availability of loans for large enterprises, and the tremendous growth of the microfinance market, SMEs are often referred to as the ‘missing middle’.

IWB bills itself as

a web-based marketplace connecting individuals across the globe with opportunities to invest directly in Small to Medium Sized Enterprises (SMEs) in developing countries.

It proposes to use grassroots lending practices, which, if I am correct, would work much the same way that Kiva.org. does, and in fact, investors can lend as little as $100.  Each $100 then buys part of a $25 000+ loan. 

There isn’t much else available on the site, but perhaps the newsletter I signed up for will arrive with more information.  I’m curious to see how this goes.