INVESTMENT SERVICES

Increasing access to sources of impact investment finance for growth-oriented businesses

Access to finance is the most common challenge faced by Zambian SMEs. Traditional commercial bank finance and microfinance is expensive and difficult to access due to stringent requirements and inappropriate loan terms and conditions.

In addition to traditional finance, impact investment is an alternative financing option for growth-oriented Businesses.  Zambia’s impact investment ecosystem is relatively small when compared to other African countries such as South Africa, Kenya and Nigeria.  Despite impact investment funds being available for deployment to Zambia, only a fraction is ever invested due to the disconnect between impact investors and Zambian businesses.  

 

In addition, SMEs are generally not investment ready because they lack an understanding of investor requirements, and investors don’t have enough information about Zambian SMEs.

 

Through intervention partnerships, Prospero aims to address the following sector-wide constraints:

Capital

Access to investment capital is a significant constraint for high growth potential Businesses.  The high cost and stringent requirements make it difficult for companies across Prospero sectors to acquire the money needed for expansion

 

Capacity

Poor governance and management capacity make many local companies unattractive for external investment, therefore limiting their ability to raise investment finance for their businesses.

There are a limited number of fund managers on the Zambian market and the few that exist cannot grow their fund to a sustainable level. The quality of services offered by intermediaries varies, hence the need for capacity  building support.

Connections

Zambian businesses don’t often belong to networks that connect them to investors or other providers of appropriate financial services. The market has a limited number of quality service providers that can support businesses to become investor-ready and, as a result, many SMEs requiring these services cannot access them.

Compliance

SMEs struggle to comply with investors’ and other financiers’ regulations and expectations. There are also specific areas of compliance within their respective sectors that SMEs do not meet.

The Prospero Investment Services sector is comprised of four initiatives:

Growth-Stage Investment

To identify a pipeline of growth-stage, impact SMEs,  get them investment ready and link them to impact investors with the express aim of signing investment deals. 

Early-Stage Investment

 To strengthen the capacity of local fund management firms to improve their fundraising capabilities and increase their investment into locally viable businesses.

Angel Investment

To build a pipeline of SMEs that will eventually graduate towards growth-stage investments.  We will  establish an angel investment network in partnership with the African Business Angel Network, MentorMe and BongoHive to provide investment and mentorship for early-stage businesses. The establishment of this network will serve as a blueprint for the establishment of future angel networks in the country.

National Advisory Board for Impact Investment

To continue our partnership with the Zambia National Advisory Board (NAB) for Impact Investment to accelerate the growth and effectiveness of impact investing in Zambia.

 

Our Response

Prospero increases access to capital for growth-oriented businesses by building a healthy impact investment ecosystem. We work in collaboration with both internal and external stakeholders to develop the entire impact investment ecosystem as well as explore alternative financing for companies.

We partner with growth-oriented businesses in sectors targeted by impact investors through a coordinated approach that will see these businesses transition from grant support to growth-stage investment.

Our Response

Prospero increases access to capital for growth-oriented businesses by building a healthy impact investment ecosystem. We work in collaboration with both internal and external stakeholders to develop the entire impact investment ecosystem as well as explore alternative financing for companies.

We partner with growth-oriented businesses in sectors targeted by impact investors through a coordinated approach that will see these businesses transition from grant support to growth-stage investment.

Partner With Us

To achieve the specific objectives of each initiative, Prospero seeks intervention partners that include, but are not limited to:

International cooperation agencies • SME growth programmes • Private equity managers • Venture funds • SME advisory service providers  • Government agencies