Sweden’s Swedfund, a development finance institution (DFI), and the African-based credit fund BluePeak Private Capital Fund have jointly invested in West Africa-based Teyliom Finance. Swedfund contributed $5 million out of the combined investment of $25 million, aimed at bolstering financial assistance for micro, small, and medium-scale enterprises (MSMEs), particularly those owned by women in Côte D’Ivoire.
The funds will be under the management of Teyliom Finance’s subsidiary, Bridge Bank Microfinance (BBM). Swedfund envisions that the loan will facilitate increased financial access for women, stimulate the growth of MSMEs, and subsequently create income and employment opportunities in West Africa.
BBM has articulated its commitment to closing the market gap by customizing its offerings specifically for women entrepreneurs and MSMEs led by women. This aligns with their ongoing mission to champion gender equality and empower women financially.
This investment by Swedfund in BBM signifies its initial entry into the Ivorian market since establishing a regional office in Abidjan, Cote d’Ivoire’s largest city, a year ago.
Kitanha Toure, the Head of Swedfund’s Abidjan office, informed Impact Investor that the DFI is dedicated to aiding in the development of a gender strategy. She elaborated that in markets like Côte d’Ivoire, MSMEs often face challenges in securing funding, particularly those led by women. Responsible lending to such enterprises could catalyze private sector growth, trigger formal employment opportunities, and advance gender equality.
Swedfund, Teyliom Finance, and BBM have mutually agreed on the implementation of a gender strategy, which Swedfund will support and monitor throughout the loan tenure. Previously, Swedfund has invested in BluePeak, an alternative asset management firm. To ensure greater availability of long-term capital for mid-sized firms and to facilitate the expansion of African businesses, Swedfund recently announced its commitment to investing in both BluePeak and Vantage Mezzanine Fund IV, another Africa-based credit fund.
Operating across 12 African countries across five sectors, Teyliom Finance is a subsidiary of the Teyliom Group. As part of their commitment to their clients, Swedfund’s portfolio companies are expected to adhere to client protection standards outlined by Cerise+SPTF, a collaboration between the global organizations Social Performance Taskforce (SPTF) and the French nonprofit Cerise aimed at regulating and enhancing social and environmental performance management.
Throughout the loan tenure, BBM intends to continue prioritizing responsible lending and to certify its practices in client protection. Such equitable practices, according to Toure, are pivotal for achieving positive developmental impact. The standards mandate fair and responsible handling of clients, particularly in sales and debt collection activities.
Approximately two-thirds of Swedfund’s investments are directed towards sub-Saharan Africa across diverse sectors including energy and climate change, financial inclusion, sustainable enterprises, and food systems. Although historically focusing predominantly on East Africa, this DFI aspires to expand its investment reach in both Francophone and Anglophone West Africa, facilitated by the newly opened office in Abidjan.
Additionally, Swedfund supports the development of sustainable projects in OECD/DAC-recipient nations through its project accelerator facility. The focus in West Africa, according to Toure, mainly centers on renewable energy, green infrastructure, and sustainable transport. Recently, they funded a feasibility study centered around transforming organic waste into biomethane, a potential green alternative for urban transportation in Dakar, Senegal.
Source:InnovationVillage