New Sh2.3 billion fund to boost Kenyan SMEs

Monday, May 21, 2018 — updated on December 26, 2020 - 2 min read

Triodos Bank fund manager Karel Nierop, AlphaMundi Group director David Maina and founder and managing Partner Tim Radjy on May 21, 2018 at Serena Hotel in Nairobi during a media briefing to launch a multi-billion investment fund targeted at Kenya’s agricultural and renewable energy sectors. PHOTO | SALATON NJAU | NMG

By IVY NYAYIEKA

What you need to know:

The fund is due for launch by the end of the year.
Interest rates will range from nine to about 15 per cent.
In the past, the two partners have invested in Twiga foods, M-kopa and Fenix, a household solar company in Uganda.

Global impact investors Triodos Investment and AlphaMundi Group plan to launch a Sh2.3 billion fund targeting companies in agriculture and renewable energy sectors.

The fund, dubbed AlphaJiri, will incorporate both debt and equity investments for small and medium-sized enterprises in the sector.

The fund is due for launch by the end of the year. Interest rates will range from nine to about 15 per cent.

“There’s a lot of small and medium-sized enterprises and businesses that cannot get a loan within local financial markets because they are still at too early a stage to cater to collateral requirements from local banks or strict requirements from private equity banks,” said Mehboob Madhavji, co-founder of AlphaMundi, speaking at the announcement.

Sh300m grant

AlphaJiri will integrate a Sh300 million Kenyan grant from development agencies in Sweden, US and Germany among others for a technical assistance facility.

This will support the companies in measuring and reporting social impact as well as researching new products.

In the past, the two partners have invested in Twiga foods, M-kopa and Fenix, a household solar company in Uganda.

Through co-investors, they hope to grow the fund to Sh8.3 billion by 2025.

“If possible we would like to do it with local investors but many banks are quite conservative in the funding of social businesses in the region and it is our job to make these social business attractive to local investors ,” said Mr Madhavaji.