Proparco Supports The Development Of High-impact South African SMEs
Proparco Supports The Development Of High-impact South African SMEs. Proparco is providing a €2 million ARIZ PRIME portfolio guarantee to the ASISA ESD Fund (comprising the ASISA Enterprise Development (ED) Fund and the ASISA Supplier Development (SD) Fund), managed by the fund manager, Edge Growth Ventures (Pty) Ltd (Edge Growth Ventures), a subsidiary of the Edge Growth Group (Edge Growth).
The ASISA ESD Fund targets the expansion and growth of small and medium-sized enterprises (SMEs) in South Africa, particularly those owned by people from historically disadvantaged backgrounds, and which have the potential to create positive and sustainable social and environmental impacts.
The ASISA ESD Fund was set up by the Association for Savings and Investment South Africa (ASISA) in partnership with Edge Growth. ASISA is an association body established in 2008 to represent the savings, investment and insurance sectors, which contribute significantly to the South African economy.
One of the mandates of the ASISA ESD Fund is to target SMEs that demonstrate the potential to create positive social value through job creation, transformation, social and/or environmental impact, in particular aligned with the UN Sustainable Development Goals. The ARIZ PRIME portfolio guarantee granted by Proparco is a risk-sharing mechanism that will support the ASISA ESD Fund to invest in SMEs in their growth phase that require business development and long-term financial support via equity or quasi-equity investments.
The fund manager, Edge Growth Ventures, specialises in managing enterprise and supplier development funds, and has over €115 million of capital under management. Since 2007, Edge Growth has developed its expertise in SME development through a range of solutions that address the three main constraints faced by SMEs: access to finance, access to market and access to skills.
According to Fay Mukaddam, Chairperson of the ASISA ESD Funds: “The world has increasingly moved closer together and tangible commitment to social responsibility remains a global indicator of effective and ethical corporate leadership. By actively supporting high-impact black-owned small and medium businesses to develop into contributors to the economy and by extension create platforms for employment opportunities, we continue to strive to make a difference in our country and deliver on the mandate of our members. We are thrilled and grateful for Proparco’s continued unwavering support for the ASISA ESD Funds and we look forward to a long and mutually beneficial association.”
“Proparco is pleased to renew its partnership with the ASISA ESD Fund, following an initial operation in 2019. Through the deployment of the ARIZ PRIME guarantee, Proparco facilitates investments in high-impact SMEs, and thus contributes to one of its strategic objectives of reducing socio-economic inequalities. We are proud to be associated with this project, which exemplifies the essence of inclusive and impactful economic development”, says Steven Gardon, Regional Director for Southern Africa and Indian Ocean at Proparco.
