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RENEW recently hit the four-year mark of the five-year Accelerating Business Growth Project (ABG) in Ethiopia, a collaboration agreement with Global Affairs Canada. The ABG project aims to support high potential, responsible small and medium enterprises (SMEs) in Ethiopia so they can attract and efficiently use finance to scale up, enabling them to play a stronger role in the Ethiopian economy. The project addresses the gap found in the capital markets in Ethiopia and in many other countries in Africa, called the “missing middle”. Learn more about the project here.
With four years completed and the May 2021 finish line quickly approaching, we thought it was a good time to look back and celebrate some of the project outcomes achieved to date (these results are also represented in a visual format below):
- We are supporting 5,806 jobs across the SMEs in our program of which 3,613 or 62% are held by women.The project target of 5,000 jobs was recently exceeded.
- We have helped SMEs attract $56M CAD in financing for their businesses through 85 investments, to help them scale, create jobs, and contribute to Ethiopia's private sector.29 of these investments have gone to women-owned businesses, with an average investment size of $493K CAD.
- We have trained and graduated 84 finance professionals (of which 25 are women) and 61 executives (of which 26 are women)from our rigorous CFO100 and Exec's Program training and have equipped them to be strong and ethical managers of Ethiopian SMEs.
- We have trained over 700 SMEsand resource providers on private equity through our PE500 incubator program, equipping them to access or help others access growth capital.
As we reflect on this progress and these stories of impact in our 2019-2020 Impact Report, we do so in a subdued manner recognizing the reversal of outcomes that are expected in light of the COVID-19 pandemic's severe impact on East Africa's already fragile private sector. According to ANDE[1], a funding gap of $930 billion already existed for SMEs in emerging markets prior to the pandemic, and this only stands to widen. The RENEW team has been working hard to develop and deliver virtual programs directly helping SMEs respond to the challenges of the current climate under COVID-19 and providing resources and dedicated coaching to help them access much-needed funding during this time.
The economy of Ethiopia has increasingly strengthened during the last two decades as industrialization has expanded. Between 1999 and 2015, the poverty rate decreased by 7.6%[2], lifting roughly 8.3M Ethiopians out of poverty. COVID-19 is putting these developmental outcomes at risk by constraining business growth and capital attraction for SMEs which will be most impacted and will require timely support in order to survive. In fact, it is estimated that 42% of all SMEs in Africa are in danger of failing within the next six months[3]. For this reason, we believe that programs like ABG, working to leverage capital into SMEs and training local managers to increase their capacity for scaling companies, have the greatest impact on development outcomes.
Cover Photo by Ian Christmann: www.ianchristmann.com
Renew Capital is an Africa-focused impact investment firm that backs innovative companies with high-growth potential. Renew Capital manages investments made on behalf of the Renew Capital Angels, a global network of angel investors, foundations and family offices who seek financial returns and sustainable social impact. For the latest on investing in Africa, subscribe and follow us at our social links below.
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