MICROCAPITAL BRIEF: Regional MSME Investment Fund for Sub-Saharan Africa (REGMIFA) Raises $24m from BMZ via KfW

The German Federal Ministry for Economic Cooperation and Development, which is also known by its German acronym BMZ, recently invested EUR 20 million (USD 24.3 million) in the Regional MSME Investment Fund for Sub-Saharan Africa (REGMIFA), which supports micro-, small and medium-sized enterprises (MSMEs) in 19 countries. The investment, which BMZ issued through Kreditanstalt für Wiederaufbau (KfW), a government-backed development bank in Germany, is earmarked for the nine of REGMIFA’s target countries that participate in the G20 Compact with Africa. A total of 12 African countries are active in the Compact with Africa, an effort to improve these countries’ “macro, business and financing frameworks” to make their economies more attractive to private investment.

REGMIFA has an asset size of USD 160 million, with participation from both public and private investors. Symbiotics, an investing platform based in Switzerland, serves as its fund advisor.

Symbiotics, founded in 2004, provides for-profit investment intermediary and business services to investors and practitioners of MSME development as well as funders of low- and middle-income households. The company reports a direct investment portfolio of USD 2.3 billion, with its local financing intermediaries serving 1.6 million small businesses and households at “the base of the pyramid” in 77 emerging markets as of 2019.

Founded in 1961, BMZ focuses on economic development in Germany and approximately 60 other countries. For 2020, the ministry had a total budget of EUR 508 billion (USD 593 billion).

KfW was founded in 1948 and is owned by the federal and local governments of Germany. At the end of its 2019 fiscal year, KfW held EUR 506 billion (USD 590 billion) in total assets, having disbursed loans totaling EUR 69.1 billion (USD 80.7 billion) during the year. Of its budget, 43 percent was allocated for domestic use.

By Tejas Gumudavelly, Research Associate

Sources and Additional Resources

Symbiotics press release
https://symbioticsgroup.com/news/kfw-development-bank-invests-eur-20-million-in-the-regional-msme-investment-fund-for-sub-saharan-africa-regmifa/

REGMIFA homepage
https://regmifa.com/

Compact with Africa homepage
https://www.compactwithafrica.org

BMZ financials
https://www.bundeshaushalt.de/#/2020/soll/ausgaben/einzelplan.html

BMZ homepage
https://www.bmz.de

KfW homepage
https://www.kfw.de

KfW 2019 financial report
https://www.kfw.de/PDF/Download-Center/Finanzpublikationen/PDF-Dokumente-Berichte-etc/1_Gesch%C3%A4ftsberichte/KfW_FB_2019-2.pdf

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