BlueOrchard has announced the launch of the “BlueOrchard Covid-19 Emerging and Frontier Markets MSME Support Fund”.
The Fund is backed by prominent public, and private investors who will jointly support its launch with around USD 140 million. It is in partnership with Schroders, CDC (the UK’s development finance institution), DFC (U.S. International Development Finance Corporation), and JICA (Japan International Cooperation Agency.
“We thank our partners for their resolve and support for a key facility which will allow mitigating some of the challenges of the pandemic and we are proud of this remarkable collaborative effort of our teams across the globe,” said Maria Teresa Zappia, BlueOrchard’s Chief Impact and Blended Finance Officer & Deputy CEO
The Fund is expected to finance 20 institutions, serve three million micro-entrepreneurs, and maintain 60 million jobs per USD 100 million. The Fund has a target size of USD 350 million. KfW, on behalf of the German Federal Ministry of Economic Cooperation and Development (BMZ), are currently in the due diligence stage and intend to join the circle of investors.
The Fund will be further equipped with a dedicated Technical Assistance Facility supported by SECO (Swiss State Secretariat for Economic Affairs) to fast track the recovery of MSMEs even in the most vulnerable sectors and geographies.
The wide-ranging impact of the Covid-19 pandemic threatens to undo decades of progress made toward reducing poverty and inequality globally. Whereas Government support has been swift in most developed markets, it has largely been absent in emerging and frontier markets when it comes to supporting entrepreneurs and setting up effective support and recovery programmes.
“Unprecedented times require decisive action, and innovators who go ahead.” Philipp Müller – CEO
Though many financial institutions have weathered the current crisis without major disruption, others need support in order to keep financing MSMEs, which build the backbone of developing countries in terms of economic growth and employment. During these times, pioneering impact investors like BlueOrchard have a key role to play in ensuring that these businesses in developing countries are not left behind.
“Unprecedented times require decisive action and innovators who go ahead. We are very thankful and proud that we successfully brought together a renowned group of public and private actors at record speed to support those most in need. For 20 years, we remain true to our mission to reduce poverty and inequality globally. The impact of the pandemic has made our conviction even stronger,” said Philipp Müller, BlueOrchard’s CEO.
The Fund qualifies under the the 2X Challenge criteria — a commitment by the development finance institutions of the G7 to mobilize USD 3 billion by 2020 toward investments that support women’s economic empowerment in emerging markets.
BlueOrchard Finance Ltd (BlueOrchard) is a leading impact investment manager and member of the Schroders Group. In Kenya, Blue Orchard operates from Nairobi Garage // Kilimani and has invested to date over USD 7 billion across more than 80 countries with 211 million people with low income access to financial and related services as of March 2020.