Invest Africa, the leading trade and investment platform for African markets, has launched a new program to support over 500 African MSMEs. The Next Generation Africa Forum (NGAF) will take place virtually on 16th September using a digital platform.
The forum is intended to connect MSMEs across the Continent with practical support from leading banks, VCs, and multi-national tech companies. The partnership will also include incubators such as Google, KPMG, DHL, Aon and 4G Capital.
Through a series of free to access interactive workshops, pitches and discussions, the NGAF aims to offer solutions to the challenges facing MSMEs on the continent.
The forum will also be offering MSMEs the support they need to thrive in a challenging economic context. Applications are now open for MSMEs to secure their place at the Forum where sessions will focus on building pathways to formality. Other focus areas include preparing businesses for investment, accelerating growth and managing digital risks.
The Africa Debate
Taking place during Invest Africa’s flagship event, The Africa Debate, the Next Generation Africa aims to provide a strong platform to foster collaboration between financial services, investors, entrepreneurs and policy makers.
The Africa Debate regularly assembles Heads of State and Ministers from across the region. It also attracts business leaders and international investors to discuss future avenues for sustainable growth across the Continent. It also aims to encourage public-private cooperation towards development goals.
Karen Taylor, CEO of Invest Africa highlighted some of the challenges MSMEs face on the African continent.
“We are excited to introduce a new programme exclusively aimed at leveraging financial and business support for MSMEs at The Africa Debate this year. Through our network of over 400 businesses and investors across the Continent, we have seen first-hand the challenges the pandemic has created. We have also been witness to the resilience and energy within Africa’s entrepreneurial ecosystem”.
Karen Taylor
According to Taylor, they have received engagement from their partners in the private sector and government is testament to the importance of MSMEs to Africa’s future growth. According to him, Invest Africa remains “committed to leveraging our market position to support a healthy business environment for MSMEs and investors alike”.
MSESs’ contribution to African economies
MSMEs form the backbone of Africa’s economies and are the engine of the region’s job creation drive, accounting for 70 percent of employment. With a high proportion of informal enterprises, many of Africa’s MSMEs, have been hit hard by the COVID-19 pandemic.
Addressing the structural difficulties that small businesses in Africa face will be essential to both the Continent’s short-term economy recovery and long-term development.
African MSMEs have historically faced numerous barriers to growth. Sitting at the riskier end of the spectrum, access to private financing for early-stage businesses is challenging.
Small market sizes and low levels of regional integration preclude many private investment options. Meanwhile commercial banks struggle to offer adapted loans where collateral is limited and credit assessments are often unreliable. This leaves smaller businesses faced with higher interest rates than their larger peers.
Invest Africa noted that in sub-Saharan Africa, lending to MSMEs ranges between 5 and 20% of traditional banks’ portfolios. This compares to a range of 20 to 60% for OECD countries. Even where financing can be secured, to be successful it needs to be accompanied by technical support to combat the skills deficit faced by many MSMEs, Invest Africa said.
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