Part of the mandate of microfinance banks is to provide financial services to the poor who are traditionally not served by the conventional financial institutions or deposit money banks.
To effectively fulfill this mandate, some microfinance banks in the country have to seek funds from shareholders, and investment institutions at affordable rates.
Consequently, Fragg Investment Management, a social fund management and investment advisory company has partnered with two leading Nigerian Microfinance Institutions – LAPO MFB Limited and the Grooming People for Better Livelihood Centre (NGO), to extend funding to Small and Medium Enterprises (SMEs) in Nigeria.
The managing partner of Fragg Investment Management Limited, Franklin Odoemenam disclosed to Business Day, in an interview that an MOU has been signed and agreement reached by the three partnering institutions to make funds available to promising SMEs in Nigeria.
The total portfolio under management in this scheme is N5 Billion (USD25 Million). The Grooming Centre and LAPO MFB LIMITED have made this sum available, to target the SMEs in Nigeria.
According to Odoemenam, discussions have commenced with some foreign investors that have indicated interest in the scheme on ways of widening the outreach and scope of the project. After the successful deployment of the fund, there are further plans to launch sector specific follow-on funds that will focus in Nigeria and some other markets in Africa.
While concentrating on the task of providing capital to small businesses in Nigeria, LAPO MFB and the Grooming People for Better Livelihood Centre, have engaged Fragg Investment Management in the management of the fund which will target SMEs in the identified sectors with much larger funding volumes and financial needs.
The multi sector SMEs fund has identified some priority sectors. A special attention will be dedicated to the SMEs operating on the impact Sectors such as education, health, agriculture, micro-housing, microfinance, insurance, renewable energy, services, trading, manufacturing and distributorship, among others.
A special feature of the fund will be the provision of technical assistance to the investees by the fund manager – Fragg Investment Management. In this case, funds will be deployed to eligible SMEs and technical assistance will be subsequently offered to them in their areas of need, for example: Financial management (Cash flow and liquidity management), basic book keeping methods and practices, development of strategic business plans, internal control and audit, risk management etc.
Odoemenam, the managing partner of Fragg Investment Management Limited, maintains that the fund will continue to build strategic alliance with good and growing SMEs that have shown positive growth capabilities, good management practices and evidences of profitability.
The investment firm provides funding linkage services to SMEs that have financial needs. Through the funding linkage services, the firm connects larger SMEs to foreign investors that can provide both Equity and debt instruments to the more advanced and larger SMEs.
For the management of the fund, Fragg Investment management boasts of competent and highly skilled young professionals with backgrounds in the field of fund management, banking and finance, accounting, SMEs development, Microfinance, project management, development planning and policy.
The fund is currently assessing applications of eligible businesses as well as channeling funding to them. Fragg Investment management welcomes investors and interested entities in the scheme, to join hands in the promotion of access to inclusive financial services in Nigeria.
HOPE MOSES-ASHIKE
