Solwezi Today

GroFin Zambia adds sheen to SMEs

From Solwezi Today 

GroFin’s business development support helps clients to grow their business management skills set and deepen their insight into market and industry, to improve operational efficiencies and achieve best practice.

GROFIN Zambia has opened its doors in the country as an innovative development financier poised to add a new dimension to small-scale business people who most times lack advice in their undertakings.

The company thrives on assisting entrepreneurs of small and growing businesses with appropriate finance and value-adding business support , and in the process helping to create jobs and drive socio-economic empowerment.

GroFin Zambia, which was launched on 16th September, 2014 at a ceremony graced by Secretary to the Treasury, Fredson Yamba , has a firm belief in offering solutions to emerging businesses as opposed to only extending financial assistance to them.

With risk capital in excess of US$400 million, GroFin provides a proven blend of financing and value-adding business support to underserved entrepreneurs in the small and growing business sector.

Through access to appropriate levels of business finance, advisory services such as development assistance, and opportunities for businesses to achieve sustained market linkages, the company achieves verifiable results.

GroFin is an award-winning, international and multicultural company with a presence in 14 countries. It is supported by 25 international investors, development funders, banks, corporations, and foundations.

Its sound character and its strides to reframe the way Small and Medium Enterprises (SMEs) are treated have made GroFin a household name in its operational areas.

GroFin’s illustrious record includes the 2007 Africa Investor Award , the 2008 Africa Investor Award for Best Initiative in Support of SME Development, the 2010 World Business and Development Award, as well as the 2013 Ghana Finance Award.

“GroFin’s focus on viability as the cornerstone of investment decisions allows for the financing of deserving start-up and growing businesses that are unable to obtain funding from conventional lenders.

“Our emphasis is on the sustainability of the business and its potential to grow and deliver positive socio-economic impact,” says Jurie Willemse, the Chief Executive Officer of GroFin, whose offices in Zambia are at Plot 3827 Parliament Road, Olympia Park, in Lusaka.

 

The company seeks to address the specialised needs of small and growing businesses classified as being part of the ‘missing middle’. These are businesses that are too small for private equity but too large for microfinance.

Worldwide, the failure rate among these businesses is 70-90 percent in part because they do not have the track record and/or collateral required by traditional financiers.

However, these entrepreneurs need more than just access to money to create viable enterprises that deliver sustainable returns and positive social impact- they need business support and market access.

“GroFin is an international award winning specialised financier and provider of business support to small and growing businesses requiring between US$100,000-1.5 million in finance.

“We have an existing client base across Africa and the Middle East, the internal capacity, and the market knowhow to help local business owners succeed,” says Yana Fleming, who is head of group marketing and communications.

The company has a sound record that has made it spread its wings to Rwanda,Kenya, Tanzania, South Africa, Uganda , Ghana, and Nigeria.

Other countries where it commands its presence are Egypt, Iraq, Jordan , Oman, Mauritius, and Dubai.

It has supported over 7,OOO businesses and helped sustain more than 16,000 jobs from the US$170 million it has invested in SMEs, of which 27 percent are female owned. About 7,500local suppliers have benefitted from GroFin’s support.

Since 2004, GroFin has invested US$145 million in 384 companies.

“Staying mission focused, successive GroFin funds have shown increasing USS gross returns from 3 percent in 2004 ,to seven percent in 2008 to 10 percent in 2013, proving that being a development business should not come at the expense of financial viability.

“Armed with a decade of experience, demonstrable impact, and a blended value, offering various levels of risk and return, we are moving into the next stage of sustainable investment at the base of the SME pyramid,” says Willemse.

GroFin’s pricing is open and transparent, and is discussed during a client’s application process.

It is calculated on a case-by-case basis taking into account the unique characteristics of the business and its owners, and includes the company’s value-adding business support.

The decision to enter Zambia was based on several strategic factors, such as its growing economy, solid and improving business environment, and a strong team of local professionals.

According to Ernst & Young, Zambia is one of Africa’s top five performers for 2012 -2017 growth projections.

Zambia’s thriving minerals sector is already fuelling development in complementary sectors, but economic diversification is stalled by a relatively inadequate financial sector.

Since establishing an office in Zambia, GroFin has already provided business support and finance to local entrepreneurs.

These enterprises range from poultry farms to hotels to industrial equipment suppliers.

In the medium and long term, the company aims to help Zambia build strong supply chains in the extractive industry and beyond.

With the new Small and Growing Business Fund, GroFin is seeking to allocate up to 40 percent of its portfolio to companies providing vital goods and services.

This means helping Zambian business owners to improve food security, provide better health care, educate more youth, and build more human capital and a more productive work force.

“In the past my government has been critical of excessive pricing in the SME financing market.

“Thus one of the reasons I am glad GroFin has arrived is because they offer competitive risk-adjusted rates designed to permit businesses to grow and flourish,” says Yamba.

The GroFin Zambia team comprises Chibamba Kizito Lopa, who is the Investment Executive, Robinson Daka, the Investment Manager, and Mwiche Namundi, who is Investment Operations Manager.

GroFin has indeed opened its doors in Zambia at the right time when SMEs are eager to grow their businesses without being overburdened with unreasonable demands from financiers who do not even offer advisory services.