Brussels, 23/08/2006 (Agence Europe) - The European Investment Bank (EIB) will contribute USD 5 million to the Business Partners International Kenya SME Fund (BPI-K). BPI-K is a Kenyan Limited Partnership that invests in young Kenyan SMEs focusing particularly on small companies and investing between USD50,000 and USD500,000 per company. The fund is co-sponsored by IFC and Business Partners International (BPI), a subsidiary of Business Partners Ltd (BPSA), a South African SME investment specialist. A press release explains that other investors in the fund, which is targeting a total size of USD15m, include IFC, CDC Group plc, Trans-Century Ltd and the East African Development Bank.
With active support from BPSA, BPI-K will be managed by an experienced Kenyan team, and aims to build on the successes of Business Partners Ltd, which has operated in South Africa since 1981. It is the second fund raised by Business Partners International (BPI) following the successful launch of the BPI Madagascar fund, also supported by the EIB. The BPI model will make use of investment instruments developed by BPSA specifically for the SME sector, which are primarily debt and quasi-equity based. In addition to access to capital, BPI-K investee companies will have access to a USD 2.5m technical assistance fund that will be used to enhance their operations.
The EIB's investment in BPI-K provides further support to the initiative to extend the BPI funding model into new countries on the African continent and to support the growth of SMEs, a key objective of the European Investment Bank's mandate under the Cotonou Agreement. The press release also explains that the combination of experienced local investment executives and the highly adapted BPI model should provide a welcome boost to a sector that remains underserved in Kenya and the rest of Africa. The Fund will also benefit from the support and involvement of the EIB's regional representation in Nairobi.