GroFin pan-Africa fund holds $125m first close

The $160m fund is targeting small to middle market enterprises to plug the financing gap between microfinance and commercial banks.

South Africa-based growth finance company GroFin has held a $125 million (€86 million) first close on its first pan-Africa fund.

GroFin Africa Fund will target risk capital investments of between $100,000 and $1 million in Nigeria, Ghana, Kenya, Tanzania, Rwanda, Uganda and South Africa. The firm said in a statement that it is expecting a $160 million final close by November.

The fund’s limited partner base includes the African Development Bank, UK government-backed fund-of-funds CDC, Dutch development bank FMO, the Shell Foundation, the International Finance Corporation (IFC) and GroFin.

Investor contributions to GroFin’s total assets under management include: $30 million from the IFC, $30 million from CDC, $20 million from FMO, $20 million from the African Development Bank, $15 million from the Shell Foundation and $10 million from GroFin, according to a statement from the Shell Foundation.

The latest fund, which is still open to additional investors, is aiming to fill what GroFin says is a gap between African micro-finance, which tends to cater to informal entrepreneurs needing less than $50,000, and commercial banks and private equity, which prefer to finance larger companies which require over $1 million.

GroFin has already fully invested its $25 million East Africa Fund . The firm also manages a $30 million fund targeting Nigeria and a $7 million pilot fund fully invested in South Africa.