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GroFin becomes latest signatory to IFC Impact Principles

15 December 2020. Bambous, Mauritius. GroFin is proud to further its commitment to global best practice in managing investments that generate impact by becoming a signatory of the Operating Principles for Impact Management. IFC led the development of and launched the Impact Principles in April 2019 to provide a global standard and reference point for assessing the impact management systems of investment funds and institutions. The Principles provide a framework for investors to ensure that impact considerations are purposefully integrated throughout the investment life cycle and aim to bring greater rigour and transparency to the impact investing market. As a signatory, GroFin would be required to produce annual disclosure statements describing how each Principle is incorporated into its investment process and to carry out independent verification of its impact management and measurement system.

Brienne van der Walt, CEO of GroFin, says becoming a signatory is a milestone that publicly demonstrates and reinforces the company’s disciplined approach to achieving, measuring, and reporting on impact.

“GroFin was founded to be an agent of impact and recording how our investments improve lives and communities has always been an integral part of who we are and the commitment we make to our investors. We have continuously sought to improve our impact measurement and management framework and to ensure that we adhere to international best practice. We view this as another important step on that journey.” – Brienne van der Walt, GroFin CEO

Roubesh Jhumun, GroFin’s Impact & ESG Manager, says adhering to the Impact Principles further exemplifies GroFin’s engagement to establish a robust impact management system and provide greater transparency on our ability – and that of our investors and partners – to generate long-lasting positive impact in the communities where our investees operate.

“GroFin is excited to become part of a global community of impact investors joining hands to share insights and learn from one another as we continuously push the frontiers of impact measurement and management practice. As part of this community, GroFin can also contribute to the further development of the impact investment industry which continues to grow and mature.” – Roubesh Jhumun, GroFin Impact & ESG Manager

According to the Global Impact Investing Network (GIIN), the size of the global impact investment industry is estimated to be around $715 billion. The GIIN says the industry continues to show steady growth, while impact measurement and management practices have noticeably evolved over the past decade to become sophisticated and rigorous.

About GroFin

GroFin is a specialist, impact-driven SME financier. We help entrepreneurs succeed by providing them with expert advice, continuous guidance, and financing to grow their businesses. We believe that growing a small business sector that can create sustainable jobs is the most powerful driver of social and economic development that truly improves people’s lives.

Since its inception in 2003, GroFin has invested in over 700 SMEs and sustained nearly 90 000 jobs. Headquartered in Mauritius, we offer financing and support to SMEs in 14 countries in Africa and the Middle East. GroFin is supported by 34 international finance institutions, development organisations, and private funders who have committed nearly $510 million in capital & grants to our funds.

GroFin helps Saboba survive COVID-19 lockdown in Jordan

When the first cases of COVID-19 were detected there in mid-March-2020, Jordan’s government quickly responded by imposing one of the strictest lockdowns in the world. Jordanians were completely confined to their homes for several days and later only allowed to venture out to purchase food and essential items.

Although restrictions were later gradually eased, the impact on Jordan’s economy was severe and small businesses bore the brunt of it. Al-Mutamayeza for Frozen Food Trading, which trades under the name Saboba, is a Jordanian wholesaler distributing high-quality frozen and processed meat and poultry products. The Nomou Jordan Fund has provided Saboba with three rounds of funding from 2014 to 2017. ​

Saboba had to cease production during the period of strict lockdown and could only resume its operations at the end of May. Although its food products could still be sold, the restrictions and their impact on the economy caused a drop of more than 60% in Saboba’s sales and a delay in payments from many of its customers. The lockdown also took effect right at the time Saboba planned to install a new production line and its newly imported equipment was left stuck in customs. ​

​While nearly all activity in the country had ground to a halt, GroFin Jordan reached out to key decision-makers to arrange the release of equipment that were shipped to Saboba’s supplier (partially owned by Saboba’s shareholders) in order to avoid severe delays in setting up the new production line. And further to its business support offering, GroFin Jordan also introduced the client to logistics service providers to help move and install the machinery and assisted the business in obtaining the necessary permits to resume production.

“We managed to get our new machinery, could meet demand, and maintain the brand’s reputation. The company was under the threat of closure. The support offered by GroFin Jordan meant we survived and are back in business”

Raed Mustafa Saboba, owner of the business

Saboba employs 15 people. Salah Ali Hasan Qatam has been working in Saboba’s warehouse since 2008. He supports his wife and five children, aged 13 to 24.

“I am very proud to have this job as it enables me to define my future and that of my family. Working here allows me to save some money for my children. I also hope that I will be able to buy a house instead of paying rent.”

Salah Ali Hasan Qatam, Saboba employee

GroFin launches COVID-19 SME Support Fund in Northern Iraq

GroFin, with the support of USAID through a gift from the American people, is extending $1.5 million in financing to help small businesses in Northern Iraq overcome the crippling impact of the COVID-19 pandemic.

Ashraf Esmael, GroFin Chief Investment Officer: Middle East, says the pandemic has placed economies under immense pressure and has hit SMEs especially hard.

“The sudden halt in trading caused by strict lockdown measures has left many small businesses in Iraq’s Nineveh governorate struggling to cover their expenses. We are providing them with the working capital they need to survive and to preserve jobs and livelihoods.” – Ashraf Esmael, GroFin Chief Investment Officer: Middle East

The Fund offers loans of between $10,000 and $100,000 to existing businesses. The loan tenor is between 12 and 48 months, where the first 12 months is interest-free and a concessionary interest rate of 5% is levied for the remaining term.

Esmael says GroFin has moved quickly to adapt its existing programme in Northern Iraq to respond to the urgent financing need created by the COVID-19 crisis. In 2019, GroFin launched Northern Iraq Investments (NII) to help rebuild the local SME sector after the severe damage inflicted on the region’s infrastructure and economy when it was invaded by ISIS.

“Our work in Northern Iraq has shown us that access to financing is a major obstacle for local entrepreneurs who are trying to rebuild their businesses in a very difficult environment. We knew that we had to adapt our approach in the wake of COVID-19 for NII to fulfill its goal to help grow sustainable small businesses that create jobs,” Esmael explains.

USAID has committed a total of $7.5 million to NII to support business activities and SMEs in Northern Iraq as part of its Middle East and North Africa Investment Initiative. This amount includes the $1.5 million set aside for the COVID-19 SME Support Fund.

“USAID is happy to support Northern Iraq businesses recover from the economic shock caused by this pandemic,” says USAID Mission Director Dana Mansuri.

“This flexible small business loan program is another example of the longstanding U.S. commitment to the people of Iraq. Small businesses are an important driver of growth and recovery, and thus, our ongoing support to private enterprise and entrepreneurship in Iraq is important in helping Iraqis grow, prosper, and build their futures,” Mansuri concludes. GroFin has been operating in Iraq since 2013 and its funds have already invested $7.5 million in SMEs in the country, helping these businesses to sustain 658 jobs. Its staff in Iraq have also provided technical assistance to over 100 Iraqi entrepreneurs, assisting them in setting up and formalising their businesses to contribute to economic growth and stability. GroFin Iraq currently has offices in both Basra and Erbil, with plans to open a third in Baghdad.

About GroFin

GroFin is a specialist, impact-driven SME financier. We help entrepreneurs succeed by providing them expert advice, continuous guidance, and financing to grow their businesses. We believe that growing small businesses to create sustainable jobs is the most powerful driver of social and economic development that truly improves people’s lives.

Since its inception in 2004, GroFin has invested in over 700 SMEs and sustained nearly 90 000 jobs. Headquartered in Mauritius, we offer financing and support to SMEs in 14 countries in Africa and the Middle East. GroFin is supported by 34 international finance institutions, development organisations, and private funders who have committed nearly $535 million in capital & grants to our funds.

GroFin supports SMEs through COVID-19 crisis

The COVID-19 pandemic is having a severe impact on economic activity and small businesses are bearing the brunt of this crisis in both developed and developing countries.

GroFin finances small businesses in some of the world’s most vulnerable economies. We are hard at work to increase the resilience of these communities as they deal with the fallout of the outbreak.

Our model has always centred on providing entrepreneurs with continuous support and advice. We realise that it is even more crucial than ever before during an unprecedented crisis like this. As such, we have taken several measures to continue assisting our clients despite the challenges presented by the virus and are responding as follows:

Ensuring we can continue servicing SMEs

The health and safety of GroFin’s staff and clients are our highest priority. We ensured a safe working environment for staff across our markets by implementing Environmental, Social, and Governance (ESG) measures to limit the possibility of infection. The majority of GroFin staff is working from home and we plan to extend this to all staff within the next week. All our core business platforms are available remotely so that we can continue operating and engaging with our clients using digital platforms.

Advising SMEs on measures against the spread of COVID-19

We have also focused on helping our clients to minimise contagion risk to their own employees and customers. GroFin’s Impact team developed a COVID-19 Environmental, Social, and Governance (ESG) framework, drawing on international best practise on this lifesaving issue. This ESG framework has been shared with our clients and the GroFin Investment team is providing them with support and advice to implement the measures it recommends.

Providing support to our clients

Unlike commercial lenders, we decided not to take a portfolio approach to assess the impact of the outbreak on our investees. In line with our focus on providing entrepreneurs with continuous support, we developed a toolkit to assess the disruption and impact on key business elements of each SME in our portfolio.

We believe this will allow GroFin to use our expertise to provide appropriate advice to each entrepreneur, while also giving us a view on the viability of each business during and after disruptions to their operations. The outcomes of this assessment will determine our actions to be taken per client. Where available, we will also link our investees to local relief options like government support.

As an organisation working with SMEs in some of the most challenging markets, we have always been amazed and inspired by the resilience, determination and ingenuity of the entrepreneurs who are our clients. They will need all these qualities to overcome this crisis but can rest assured that GroFin will be there to support them throughout it.

Brienne van der Walt

Chief Executive Officer, GroFin