Fanisi means “prosperity” in Swahili, and is the name of the first venture capital fund in East Africa. The fund aims for investments in Kenya, Rwanda, Tanzania and Uganda. Norfund initiated the fund and started the work to establish it in 2007. A supply of risk capital for new enterprises is crucial to achieving growth in the private sector. With the aid of risk capital, Fanisi is to establish partnerships with and invest in start-up enterprises, early-phase enterprises and SMEs with a large growth potential. In addition to owning 50 per cent of the management company, Norfund is Fanisi’s principal investor, with an investment of USD 15 million. The fund has a total capital of USD 50 million.
Shortage of capital
SMEs, and to an even greater extent start-up enterprises, are rarely on the customer list of traditional financial institutions and have difficulty in procuring long-term financing. There is often competition to finance the big, established companies, whereas the financing of new ideas, business models and services is regarded as too risky. Norfund’s work with Fanisi arises from a desire to strengthen the ability of local capital markets to take risk and to secure financing for a market segment that has long been ignored.
Professionalise small enterprises
Fanisi will make equity investments in the range of USD 0.5 – 3 million with a view to playing an active part in companies, making them professional and enabling them to grow. This will involve boardroom work, and may also involve strategic advisory services, leadership training, new accounting systems and improved Health, Safety and Environment (HSE) standards. In addition to providing investment capital, Fanisi can assist enterprises with subsidies for internal capacity and development projects. The management team has wide-ranging experience gleaned from successful entrepreneurship, operational management and investment activities, plus an extensive network in the region. The head of Fanisi, Ayisi Makatiani, has previously established, managed and sold Africa Online – a highly successful telecommunications company.
Watch a video about Fanisi here.