Project detail - Business Partners International Eas

Who is our customer

Business Partners International East Africa LLC (BPI EA)

What is our funding objective?

Business Partners Limited (BP) has successfully and sustainably focused on the provision of risk finance/capital, technical assistance, mentorship, and business premises for Small and Medium-sized Enterprises (SMEs) in South Africa for more than 34 years. It now wishes to establish Business Partners International East Africa (BPI EA) as an investment company with permanent capital and an infinite life in order to position itself as a viable and sustainable SME risk capital provider in Kenya, Rwanda and Uganda. BPI EA will continue to use the model that was successfully applied in South Africa, and more recently in Kenya and Rwanda.

Why do we fund this investment?

With the Kenyan fund having reached the end of its investment period, BPI has gained further exposure to and benefited from participating in the full life cycle of a fund. It has identified lessons on the appropriateness of the fund model for development finance, especially SME focused risk finance. BPI EA would address the inefficiencies and shortcomings BPI encountered in the fund model by establishing a perpetual life investment company, similar to BP in South Africa, consolidating the in country subsidiaries of the traditional fund and fund manager in each jurisdiction into a single vehicle and cost effectively leveraging off BP’s extensive South African back office infrastructure, proprietary management systems and experienced team. BPI EA's team and management are strong and established and have created excellent impact: the number of clients reached is unparalleled. The South African mother company BP has made 313 investments last year alone. With an average investment of US$270.000, BPI reaches a segment that is well beyond FMO's typical fund investment. In the base case BPI EA expects to finance 362 companies over the course of 10 years. BPI EA has a unique model with heavily standardized processes and a large SME database to allow for quick screening and efficiency. Technical assistance is further adding value. Due to experience in profitably investing in SMEs in South Africa for over 30 years, the database covers a host of sector information and its strong back office is in place well before the closing. Therefore, FMO believes BPI EA is well set to counter the risks that other SME funds investing tickets below US$1 mln are facing.