Plugging Africa's SME Funding Gap
Finweek English|13 April 2017

Is Africa different in terms of our financial and funding needs?

St John Bungey
Plugging Africa's SME Funding Gap

Africa has 400 companies with more than $1bn in revenue and 700 companies with more than $500m in revenue. Over the past five years, debt transactions totalling $110.2bn have been placed in African debt markets or by African companies on international markets, the majority of which was US dollar-denominated, according to PwC.

Taking all of this into account, the size of the corporate loan market across subSaharan Africa (excluding South Africa) is estimated to be greater than $150bn. While at face value these nominal sums may seem surprising, if not impressive, they mask a massive shortage of finance.

The International Finance Corporation estimates that the credit gap for small- and medium-sized enterprises (SMEs) in sub-Saharan Africa is between $70bn and $90bn. This implies a requirement to increase bank advances by threefold to this sector, if there is any hope of closing that gap.

The lack of access to capital is by no means unique to subSaharan Africa. It is the concentration of that funding gap in specific areas, and the economic reasons why, that make for interesting reading. When delving deeper, there is almost a “preferred habitat” phenomenon which, in this case, appears to be not loading on term structure or duration, but rather loading on type of counterparty and size of borrower.

Bu hikaye Finweek English dergisinin 13 April 2017 sayısından alınmıştır.

Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.

Bu hikaye Finweek English dergisinin 13 April 2017 sayısından alınmıştır.

Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.

FINWEEK ENGLISH DERGISINDEN DAHA FAZLA HIKAYETümünü görüntüle
THE HEALTH OF SA'S MEDICAL SCHEMES
Finweek English

THE HEALTH OF SA'S MEDICAL SCHEMES

As the Covid-19 pandemic abates, finweek takes a look at the financial performance of some of the largest players.

time-read
7 dak  |
5 November 2021
The effect of Gilbertson's departure
Finweek English

The effect of Gilbertson's departure

With Ntsimbintle Holdings now the major shareholder of Jupiter Mines, it could change SA’s manganese industry.

time-read
3 dak  |
5 November 2021
Making money from music
Finweek English

Making money from music

Why investors are increasingly drawn to the music industry.

time-read
3 dak  |
5 November 2021
Conviction is key
Finweek English

Conviction is key

Sandy Rheeder plays a critical role in Mukuru’s mission to open up financial services to the emerging consumer market in Africa through tailor-made technology solutions and platforms.

time-read
5 dak  |
5 November 2021
The post-pandemic toolkit
Finweek English

The post-pandemic toolkit

How CFOs can use technology to support growth.

time-read
4 dak  |
5 November 2021
Big city living exodus
Finweek English

Big city living exodus

Mini cities like Waterfall City and Steyn City are redefining city-style apartment living.

time-read
3 dak  |
5 November 2021
Big compact, big value
Finweek English

Big compact, big value

Handsome, with a hefty level of standard specification, the roomy Haval Jolion compact crossover is a great value proposition.

time-read
3 dak  |
5 November 2021
On barriers to entry
Finweek English

On barriers to entry

There are various ways in which a company or sector can achieve competitive dominance. They usually make for good investments.

time-read
2 dak  |
5 November 2021
Fear and greed in one index
Finweek English

Fear and greed in one index

To buck the trend, when markets are hot or cold, is a tough thing to do. However, it can deliver solid returns.

time-read
3 dak  |
5 November 2021
Africa's largest data centre facility coming soon
Finweek English

Africa's largest data centre facility coming soon

Vantage Data Centers plans to invest over R15bn for its first African data centre facility in Attacq’s Waterfall City.

time-read
3 dak  |
5 November 2021