In a significant development for Ethiopia’s entrepreneurial and small business ecosystem, Kuramo Capital Management has been selected as the fund manager for the Enterprise Financing Facility (EFF). This announcement follows a competitive bidding process led by the United Nations Development Programme (UNDP) and signals a bold step forward in transforming capital access for Ethiopian small and medium enterprises (SMEs) and startups.
Kuramo Capital, a renowned African investment firm, will oversee the establishment and management of the groundbreaking $100 million blended finance facility, with operations expected to commence in full swing by 2025. As part of this effort, Kuramo has onboarded Addis Alemayehu and Hilina Resom from Kazana Fund as local general partners, strengthening the fund’s connection to Ethiopia’s unique market dynamics.
The Enterprise Financing Facility (EFF) is poised to redefine how Ethiopian SMEs and innovative startups access funding. Designed with a two-layer structure that combines direct investments and Fund of Funds (FOF) operations, the EFF aims to attract diverse investors from public, private, and development sectors. This includes contributions from commercial banks, individual investors, and other financial institutions.
The fund’s model, meticulously crafted by I&P Conseil and Renew Capital, was approved by the EFF advisory board in November 2023. With plans to deploy its first direct investments by the second half of 2024, the EFF seeks to catalyze the growth of Ethiopia’s capital markets. Additionally, it will provide technical assistance to nurture new and existing fund managers, ensuring they are investment-ready and capable of deploying capital effectively.
Kuramo Capital Management brings a wealth of experience and expertise to the EFF. With nearly $500 million in assets under management (AuM) across six investment vehicles and a team boasting over 150 years of combined experience, Kuramo has anchored and supported numerous private equity funds that collectively raised over $3 billion.
As the general partner, Kuramo’s immediate focus will be on finalizing the fund’s setup and mobilizing capital for the first close by 2025. Its proven track record of fostering investments across Africa positions it well to lead the EFF’s mission of financial empowerment for growth-stage SMEs and disruptive startups.
The EFF represents a revolutionary step in Ethiopia’s capital market evolution. By fostering a robust fund management ecosystem, the facility aims to attract investors, expand funding options, and drive sustainable growth. Its innovative financial products and services are tailored to address the unique needs of SMEs and startups while balancing investor risk profiles.
As Ethiopia continues to modernize its economic landscape, the EF under Kuramo Capital’s stewardship promises to be a game-changer in unlocking the potential of local entrepreneurs and advancing the country’s capital markets.
