US$70m Enterprise Funds Spread too Thin?

Thursday, 3 October, 2013

The African Development Bank (AfDB) this week approved US $20 million of equity and a US $50-million credit line to promote small to medium sized enterprises (SMEs) within the Eastern and Southern African Trade and Development Bank (PTA Bank) member states. The concept is part of a trend to get regional trade corridors going, and the cash is being committed to the Tripartite Free Trade Area (TFTA) region.

While the money may look like a lot, it will be spread across 26 countries. Small business promotion and infrastructure will be promoted, and the amount will not go far if addressing key infrastructure issues. Business support and micro loans, however, are an effective tool for unlocking enterprise in Africa and elsewhere - lack of freely available funds is a major restraint to African economies, a problem especially prevalent for those building agricultural or food production businesses.