Equity for Africa (EFA) was set up to bridge the SME financing gap between $2,000 and $50,000 in Sub-Saharan Africa. We call this "transition investing" as it allows successful micro-entrepreneurs to transition to the next level.
We focus on a single equipment finance product, targeted at entrepreneurs with viable expansion plans that cannot access finance from conventional providers. The equipment provides security, reducing risk and allowing us to reach uncollateralised borrowers.
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Key features include:
- Targets neglected ‘transition’ range between $2,000 and $50,000, presenting major market opportunity
- Very high job creation rates, almost ten times higher than other SME investors
- Very low transaction costs due to single product focus and standardisation, estimated at $660 marginal cost over the life of an investment; standardisation also makes it easier to resource and manage at scale
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We also hope to introduce a training scheme to help existing customers achieve further growth and to encourage new applicants to develop more differentiated ideas. We believe that finance and training are more effective delivered together, boosting the impact of both.
Key features expected to include:
- Mix of skills training, mentoring and support accessing markets
- Delivered by local providers where possible, to build local market provision
- Customers charged part or full fees to ensure the scheme remains demand-driven