Business Partners International, (BPI) has announced the expansion of its operations under which it undertakes to expand its financing solutions to small and medium business owners in Malawi and Namibia.
This round of financing of US$20 million over the next 5 years, will benefit entrepreneurs in the two economies. The funds will enable BPI to undertake programmes that will help reduce the financing gap by providing access to finance for business owners, boost their efficiency, and help them to maximise their potential.
The US$20 million financial boost comes at a critical time when many business owners are under immense pressure due to the rising cost of doing business, and the ongoing pressures stemming from the COVID-19 pandemic.
Business Partners International CEO Mark Paper says that their focus on business owners in the small and medium enterprise (SME) sector is drawn from the fact that despite their role in economic growth and job creation, these business owners face many obstacles, chief among them being access to affordable finance and well as technical assistance support needed to grow their businesses.
According to Mr Paper, business owners in the SME sector typically fall in a gap in service between large corporations, who are served by mainstream financiers, and microenterprises, served by microfinance institutions. This, he adds, leaves family owned businesses, which comprise up to 95 percent of SMEs in developing countries underserved.
“There is a distinct gap in financing for family owned SMEs in both Malawi and Namibia. BPI has identified the need to support this segment of commercially viable and economically significant businesses with flexible and affordable funding that is structured around the business’s cash flow needs.” says Mr Paper.
Typically, family owned businesses are characterised as having less than 300 employees, annual revenues of less than US$10 million, and require capital of between US$50,000 and US$1 million.
BPI will also strive to ensure that 40% of all investment activity takes place outside of the two countries’ main economic hubs of Blantyre and Windhoek.
The new commitment builds upon the significant success of the initiative’s first five years of operation.
BPI operations in Malawi and Namibia began in 2014, through a limited life fund having a five-year investment period. Which lapsed in 2019.
During this time, BPI invested US$11.8 million in Malawi, of which, 85.7% were approved for indigenous Malawian entrepreneurs; 28.57% of the funds were approved for women entrepreneurs, and 1,589 employment opportunities were sustained during the period.
In Namibia, BPI approved investments to the value of US$12.1 million, of which, 97% were approved for indigenous Namibian entrepreneurs and 32.76% for women entrepreneurs. The fund facilitated 2,401 employment opportunities during the five years.
BPI will also focus on addressing gender imbalance and will be targeting 40% of all investment activity in women-owned businesses.
BPI Malawi Country Manager, Akuzike Kafwamba is confident that the funds will unlock opportunities for eligible business owners, thus enabling them to reach their potential.
He says small and medium businesses in Malawi are facing persistent pandemic-induced supply-demand imbalances, supply-chain disruptions, and rising global energy and food prices, which have been compounded by the Russia-Ukraine war.
“Business Partners International Malawi will provide SME risk financing products that combine secured loans, unsecured cashflow funding, and minority equity financing which fill in the financial service gap identified and support small and medium business owners to achieve their vision,” says Mr Kafwamba.
On his part, BPI Namibia Country Manager Sam Ikela says that if small and medium business owners are well supported and developed, they can be a catalyst for economic growth and job creation.