New Pan-African Private Equity Fund Launched in Tanzania

Mkoba Private Equity Fund was launched in Dar Es Salaam on Tuesday 29th April 2009 during the conference on private equity in Tanzania organized by the UONGOZI Institute.

With a target fund size of USD 300 million, Mkoba is the first private equity fund of its size in Tanzania.

The fund targets fast growing countries undergoing liberalization and post-conflict countries rebuilding their economies including: Ivory Coast, DRC, Ethiopia, Liberia, Mozambique, Rwanda, Tanzania, Sierra Leone and South Africa.

The fund explicitly targets equity investment ranging from 1 to 15 million mainly through providing growth capital for high-growth small and medium sized companies.

The fund, headquartered in Dar Es Salaam, will bring capital, expertise and interest from protests sponsored by local entrepreneurs in Tanzania, with the aim of filling a gap in the current range of financing available to SMEs in the regions.

Frannie Lautier, CEO and Partner of Mkoba explained why Tanzania was chosen to headquarter the fund, when in conversation with TanzaniaInvest.com: “First, there is no such fund in Tanzania. Secondly the economy is highly diversified. The country has also been investing in education in the last 2-3 decades therefore there are local cadres who can be employed and serve the companies in which we wish to invest. It is a country that has opened up while maintaining stability in its business environment. Finally Tanzania has access to a number of landlocked countries with fast growing economies where regional integration will be key. When you look at the major financial centers in the world you will notice they all have ports, linking them to the outside world: Amsterdam, New York, Singapore…so it is very important for us that a country has such feature that can serve national, regional and global markets, and give you space to innovate and get returns.”

The launch saw the presence of Tanzanian President H.E. Jakaya Kiwete as well as Prime Minister Mizengo Pinda. 

In his speach Presiden Kikwete discussed the strategic role of alternative financing for the tanzanian private sector and SMEs: “Africa’s growth is a reality.  It is also acknowledged that this growth is led by the private sector while the role of government continues to shrink. Tanzania is not exception with a consistent strong GDP growth of 7% for the last decade, which makes it one of the fastest growing economies in the African continent and in the world. The banking sector maintains a healthy capital ratio but current high interest rates make bank borrowing costly, especially for small and medium enterprises.  This aspect does not encourage business expansion despite investors’ confidence in Tanzania.  Today Mkoba Private Equity Fund joins the long list of investors in our country and the decision they have made to base the fund in Tanzania is well welcome, as the local demand for credit has grown overtime. This is good news for our private sector looking for funding. The majority of our private sector is of made of SMEs which have not been served well by existing financial facilities. Private equity can therefore help us to grow our companies and move towards better levels.”