African SMEs to get boost

International Finance Cooperation (IFC) said on Friday that it will scale up its investments on financing small and medium scale enterprises in sub-Sahara Africa to help more citizens participate in entrepreneurship in the growing regional economies.“As the region’s economies grow, more people in the world are having confidence in Africa. IFC will therefore continue to scale up its investments to support the private sector,” IFC Executive Vice President & CEO Jin-Yong Cai said during his first visit to Kenya. IFC has been one of the main financiers of the small and medium scale enterprises in the region. It has been working with local commercial banks that borrow money from the corporation for onward lending to the SMEs. IFC has such financing programs in 14 African countries.The lending to SMEs usually comes in handy because of the limited opportunities for financing faced by SMEs in sub-Sahara Africa, according to successive studies on the issue. IFC has also been involved in the capacity building and advisory services to the SMEs especially those benefiting from its loans. The corporation has also been lobbying regional governments to accelerate business reforms in order to reduce the cost of doing business and facilitate thriving of the SMEs.SMEs are seen as the engines of growth in sub-Saharan Africa because of their ability to create wealth and employment.But high cost of doing business in the region, lack of financing opportunities among other challenges have led to collapse of nearly 90 percent SMEs in the first three years of their formation.Xinhua