The gap between the demand for and supply of micro credit for micro-financing of Small and Medium Scale Enterprises (SMEs) in the Anglophone West Africa has drawn the attention of some business development companies to launch a fund that would pool funds together to fill up this gap basically in Nigeria and Ghana. Alitheia Capital (Nigeria), Goodwell Investments (The Netherlands) and JCS Investments Limited (Ghana) have come together to launch a fund focused on investing in and developing microfinance banks and entrepreneurial microfinance organizations on a social and commercially viable basis. According to the promoters of the project, “it is founded on the principal belief that improving access to affordable financial services for people in the base of the pyramid contributes to sustainable development, and that this improvement can best be achieved by developing and scaling up entrepreneurial microfinance organizations and integrating them into the mainstream financial sector. “It provides commercial long-term capital and active support to startup and growth phase Micro Finance Institutions (MFIs) to kick-start and accelerate their growth and build value whilst maintaining their social focus.” The promoters of the fund explained, “The objective of the fund is to maximize value by focusing on scalability, efficiency and leverage, and by applying a rigorous private equity approach within a mission driven setting. The geographic focus is Nigeria and Ghana. The goal is to increase the outreach of commercial microfinance organizations and to provide a market rate of return to the investors. Alitheia Capital is a professionally run business development company, advised by a dedicated, local team, and funded by professional investors who share the vision that entrepreneurial development in microfinance creates social and financial value.” At the launching of the N7.3 billion microfinance fund in Lagos , the promoters pointed out that the fund would be selectively invested in entrepreneurial microfinance institutions with the potential to generate attractive returns and positive social impact. Their strategy is to provide capital for transforming start-up MFIs, on the ground support to management teams and access to the expertise & a global network of microfinance practitioners. Speaking at the launch, the Managing Director/CEO of Alitheia Capital, Tokunbo Ishmael stated: “We are very excited about this initiative because it provides the opportunity to positively impact people at the base of the economic pyramid while simultaneously rewarding our investors with positive returns. “Our partner, Goodwell, has successfully built up a similar microfinance portfolio in India , and we are confident of repeat success in Nigeria and West Africa in general.” Wim van der Beek, Founding Partner of Goodwell Investments, said: “The opportunities for the microfinance sector in West Africa are huge. Our partners Alitheia Capital and JCS Investments have strong teams with relevant experience and we look forward to working with them to pursue attractive equity investment opportunities and provide hands-on support to entrepreneurial microfinance operators”. Before the launch in Lagos last week, the promoters of the fund had conducted an extensive study on the opportunities for microfinance in Anglophone West Africa. The findings which were also corroborated by various speakers among whom was Ngama Yerima of First Bank of Nigeria Plc, revealed that there exists huge potentials for the expansion of microfinancing in the West African region. They also noted the common challenges facing the MFIs to be inadequate financing, shortage of skilled personnel and an effective business model. They seek to provide solutions to these critical areas of micro-finance banking to guarantee the performance of their invested funds in the sector. Some microfinance operators from Nigeria and Ghana pointed out that microfinance banking is banking unusual and not as the conventional banking practice. Source: Business Day