In order to fill the “missing middle” in East Africa, Goodwell Investments and Oxfam Novib have launched new EUR20 million (US $22 million) funds. This fund will make investments in early-stage growth companies that are having trouble getting funding from banks and investment funds.
Goodwell Investments is an impact investment company that focuses on inclusive growth in industries that offer underserved communities in Africa and India opportunities to generate income. For a world where everyone has equal opportunities, regardless of gender, ethnicity, or skin colour, Oxfam Novib supports those who speak out in favour of equality.
The two organizations have a long history of assisting impact-driven SMEs and are now working together to capitalize on each other’s advantages in an initiative that marks one of the few times an NGO and an impact investing firm have worked together on an investment program for SMEs. Small and medium-sized businesses (SMEs) with a high impact potential are the focus of Pepea, a EUR20 million fund.
“Oxfam Novib played a sterling role in developing the microfinance sector as a means to provide access to financial services where they were most needed. As that sector has matured beyond the realm of NGOs, we are ready to change direction toward a less-served segment of the market. We acknowledge the challenges of SMEs in the region – especially those that are women-owned – to access fine-tuned patient capital and we now want to play a role to address that need,” said Tamara Campero, investment manager at Oxfam Novib.
With the help of its skilled local investment managers, the potential for follow-on investments from other Goodwell funds, and most importantly, a shared mission to make a positive impact, Goodwell Investments will manage Pepea’s day-to-day operations. This will support the success of the fund and the development of the portfolio. Setting and evaluating the fund’s strategic direction is a joint effort between Oxfam Novib and Goodwell.
This new fund is primarily concerned with waste management, clean transportation and logistics, sustainable agriculture, and energy. Many of the essential goods and services produced by these industries account for a sizable portion of household spending in lower-income neighbourhoods. Pepea is focusing on SMEs that promote the development of a greener, more equitable, and more gender-inclusive “human economy” that meets societal needs while preserving the environment in order to raise the quality and affordability of these necessities.
The fund’s emphasis on diversity and inclusion also makes it the perfect channel for advancing the gender-lens investing strategies of Oxfam Novib and Goodwell. Pepea provides a chance to take effective action for gender equality by funding women operating impact SMEs. The investment instruments were created with a specific focus on mezzanine finance and innovative venture debt structures to better meet the needs of female entrepreneurs and stakeholders.
“Goodwell is always looking for innovative ways to better serve the needs of SMEs, and we’re extremely pleased to have the opportunity to do so with one of the most professional, critical NGOs in the impact sector. There are so many synergies between our organisations, and I’m convinced that together, we can set higher standards in the impact investing space,” said Els Boerhof, managing partner at Goodwell Investments.