Market study on potential SME fund in Senegal
The German government has established a “Marshall Plan with Africa”, seeking to promote long-term sustainable development and cooperation. Senegal is one of the initial countries as part of this programme, and, as a result, a “Partnership for the Encouragement of Reforms” (PER) plan is being prepared, focusing on removing obstacles for private sector development. PER will seek to offer local MSMEs better development opportunities, encouraging them to grow and formalise and to create new job opportunities, particularly for younger people.
In this context, the German development bank KfW aims to set up an “Entrepreneurship Promotion Programme”, including improved access to risk capital as a key element.
The Senegalese government has proposed creating a new sub-fund to reach this goal under the framework of the recently created Sovereign Strategic Investment Fund (FONSIS). FONSIS was established with the mandate of supplying equity capital to strategic economic sectors, with an initial focus on infrastructure.
KfW contracted IPC to conduct a market study of Senegalese SMEs with a focus on their specific financing needs and their challenges in obtaining adequate financing. IPC also conducted an institutional analysis of FONSIS, assessing the feasibility of a sub-fund focused on SMEs as a potential partner.