The impact investing group Investisseurs & Partenaires (I&P) has partnered with the US Agency for International Development (USAID) to launch an innovative acceleration program in Niger, Burkina Faso and Senegal. 

The alliance aims to bring high potential start-ups and Small Growing Businesses (SGBs) to an “investment ready status”, with the underlying objective of building a sustainable entrepreneurial support ecosystem in these financially underserved countries.

The program will use a combination of seed funding, in the form of small no-interest no-collateral loans, and high-touch coaching by expert investment teams in order to maximize the chances of the SGBs to raise follow-on funding.

USAID’s support will generate a strong leverage effect on African private capital, with the objective to unlock $5.6m in equity and debt investments from investors, banks and business angels into early-stage businesses requiring individual investments between $40,000 and $400,000.

The alliance between I&P and USAID is a response to one of the key obstacles facing start-ups and early-stage small and growing businesses (SGBs) in Sub-Saharan Africa: access to seed finance and investment-readiness services. 

In the Sahel region, seed financing mechanisms are non-existent and most SGBs face high barriers in access to finance. 

The SGB support ecosystem is very sparse and currently not tooled to make SGBs investment-ready.

The alliance aims to bridge the gap of investment readiness for SGBs in the Sahel region with a focus in Niger, Senegal and Burkina Faso. 

Its main objective is to facilitate access to finance for 52 SGBs in the next three years.

The Sahel stretches from the Atlantic Ocean on the west, eastward through northern Senegal, southern Mauritania, the great bend of the Niger River in Mali, Burkina Faso, southern Niger, northeastern Nigeria, south-central Chad, and through the nation of Sudan to the Red Sea coast.

The region is one of primarily agriculture and pastoralism, which is negatively affected by periodic droughts and resultant famines. 

The project will support USAID’s development objectives in the target countries by focusing on SGBs with high developmental impact, and in particular by investing in SGBs active in the value chains of agriculture, health, education and essential goods and services.

The partnership is coordinated by Investisseurs & Partenaires (I&P), an impact investing group that has a strong footprint and experience in West Africa, and is implemented by Sinergi Niger, Sinergi Burkina and Teranga Capital, three in-country impact funds sponsored by I&P. 

Jean-Michel Severino, President of Investisseurs & Partenaires, said: “We have a sound knowledge of the financing challenges for SGBs in the Sahel region and we have a good investment track record.” 

“Throughout our investments we have proven that our investment model based on partnerships between international and local financial institutions, business angels as well as corporates has positive development impact,” he said. 

Sinergi Niger, Sinergi Burkina and Teranga Capital invest in start-ups, early-stage and small growing businesses with a strong growth and impact potential and that have financing needs between $40,000 and $400,000. 

Together they have already financed 10 SGBs, and plan to make 20+ new investments in the next three years.