Mkoba equity firm eyes Rwandan market

President Paul Kagame yesterday received in his office the chief executive officer and partner of Mkoba Private Equity Fund, Frannie Léautier, where they discussed operations of the fund and how it can benefit Rwanda’s Small-and-Medium Enterprises (SMEs). The equity fund, which is based in Dar es Salaam, Tanzania, targets equity investments ranging from $1 million (about Rwf697m) to $15 million (about Rwf10.5b), mainly through providing expansion capital for high-growth SMEs. Rwanda lacks specialised financial institutions, and the entry of the fund (probably be the first of its kind in Rwanda) will be great relief for SMEs. Speaking to the media after her meeting with President Kagame, Léautier said the fund was designed to fill the gap in the current range of financing options available to the SMEs in the region. She added that it a response to the emerging market opportunity in sub-Saharan Africa. “We talked about how best to do that in the Rwandan context and the kind of investments that would be important to undertake to grow the economy. I am happy that I have received support to launch operations in Rwanda and experiencing some of the successes,” she said. Léautier, who is a former executive director for the African Capacity Building Foundation, added that Rwandans can benefit from the equity fund by investing in it since it works with pension funds and individuals invest in it. “Currently, it’s difficult for SMEs to get funding from banks, so private equity models are helpful because they give a breathing room for companies to expand before they can start repaying the loans. She added that its impact on the capital markets will be vast as well because Mkoba Private Equity Fund hopes that once they have invested in SMEs and later exit, some of them would be able to issue IPOs (initial public offer) on the alternative market of the bourse. Finance Minister Amb. Clever Gatete, said private equity models are the kind investments that Rwanda needs since they work with SMEs, which constitute the biggest percentage of businesses in the country and are major employers. “They are bringing, not only finances, but also capacity to build local companies…they are focusing more on our priority areas, like agriculture and ICT,” said Gatete. The fund was launched last month and its strategy is to focus on fast-growing African economies that are undergoing liberalisation, including, Rwanda, Cote d’Ivoire, Democratic Republic of Congo, Ethiopia, Liberia, Mozambique, Tanzania, Sierra Leone and South Africa.

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Mkoba equity firm eyes Rwandan market