How Might PE/VC Firms Develop Local Businesses

How Might PE/VC Firms Develop Local Businesses

Small-sized and Medium Enterprises (SMEs) have a major role in contributing towards long-term economic growth and job creation. However, SMEs often face limited access to financing partly because of the relatively higher risks associated with investing in them. The SME financing challenge has been exacerbated following the introduction of significant financial regulatory reforms in the aftermath of the global financial crisis, heightening banks’ risk aversion when extending loans. Private equity investors therefore have an imperative role in bridging this financing gap through the provision of alternative funding sources for SMEs, particularly as their needs evolve, but is the play field conducive? The government has also introduced various funding house NEF, SEFA, GEP, PIC-Isibaya, etc as players.

SMEs continue to face impediments, which discourage them from accessing financing from the capital market. These include the fear of losing ownership, relatively high regulatory costs and inexperience with capital, amongst others. In this regard, most of the jurisdictions have been reviewing their respective regulatory frameworks with a view to facilitating access for SMEs.

This session will be an open discussion on how best we can address the SME funding through private equity outside of the existing approaches.

The session should be able to answer questions such as: How do we get the SME funding from Mainstream deal flow? Do we need more incentives for SMEs or rather more help to put their houses in order first? What about innovative products and technology – Can they improve the situation? What other regulatory or policy options should be put in place to encourage SMEs to join the private equity or venture capital wagon? What are the challenges, opportunities and advice from experiences?