The gap in business financing in Sub-Saharan Africa
International Finance Corporation (IFC) estimates that 84 percent of Small and Medium Enterprises (SMEs) in Sub-Saharan Africa have unmet capital needs. This is due the banking sector’s inability to adapt its commercial model to the needs of entrepreneurs in emerging economies.
Why the banking sector is unable to accommodate the needs of SMEs?
First, banks often have rigid collateral requirements – they often give loans only to businesses that can deliver land or buildings as a form of security. Mango Fund tackles this problem by employing a flexible approach to collaterals – we do accept other forms of collateral, such as manufacturing equipment and inventory, among other things.
Second, the banking sector fails to standardize commercial models and deliver products adequate for SMEs in emerging economies. In order to accommodate their specific needs, we developed an innovative approach to the due diligence process. An intensive four to eight week long investigation gives us a deep understanding of our potential clients and the challenges they face.
We want to help SME sector thrive
Mango Fund's mission is to support local Small and Medium Enterprises sector with financial and business development services. Our purpose is to build a strong private sector that fosters the economic growth and generates skilled employment. Our approach is based on the "Network View of Economic Development" by Cesar A. Hidalgo and Ricardo Hausmann and it emphases that:
- A healthy economy is the outcome of healthy businesses
- Promoting value addition in local markets grows the local capital base.
- The development of more advanced technical skills within local markets facilitates entry to larger regional and global markets.