In a conversation during the last day of European Microfinance Week, Daniel Buchbinder of Guatemala-based Alterna described his NGO’s fee-based support for young entrepreneurs. Upon Alterna’s founding in 2010, its goal was to help its clients’ businesses develop into more stable operations that could qualify for funding. The NGO had served 2,000 firms by 2015, but funders were not investing in many of Alterna’s clients. Hence the NGO launched Catalyzer, a fund that lends small enterprises USD 10,000 to USD 50,000 on a collateral-free basis. Terms range up to five years, and repayments start at 3 percent of revenue and range up to 7 percent. Since its launch in 2018, Catalyzer has disbursed USD 1 million to 71 entrepreneurs, supporting 300 jobs. To participate, businesses must demonstrate at least one dimension of impact per the IRIS+ System. Alterna has now reached a total of 3,500 entrepreneurs and is looking to spin off Catalyzer as a self-sustaining social business.
Francois-Xavier Tokpanou of Blupass noted that many businesses in Africa need help accessing professional services and developing their record-keeping practices. Blupass helps 500 clients in Cote d’Ivoire document their finances to make funders more comfortable lending to them. The firm recently expanded to Senegal.
Yves Speeckaert of EU-led Team Europe agreed with Mr Tokpanou, stating that African businesses often need long periods of coaching to grow. To become investment ready, their founders often need to develop their leadership skills, learn to translate ideas into numbers and get support on fundraising strategies. To address lenders’ hesitance to invest in these young firms, the European Fund for Sustainable Development (EFSD) guarantees loans to micro-, small and medium-sized enterprises (MSMEs) in the European neighborhood and across Africa.
This feature is part of a sponsored series on European Microfinance Week, which took place in Luxembourg and online from November 16 through November 18. MicroCapital has been engaged to report on the conference each year since 2012.
Additional Resources
European Microfinance Week 2022
https://emw2022.eu
MicroCapital coverage of European Microfinance Week since 2012, including the European Microfinance Award
https://www.microcapital.org/category/european-microfinance-week/
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