Global poverty charity Oxfam is seeking to raise £100 million from investors for a “unique” fund which will lend to small businesses in emerging markets in Africa and Asia.
The Small Enterprise Impact Investment Fund (SEIIF) was launched yesterday morning in Edinburgh at a breakfast event hosted by Standard Life and is targeting institutional investors.
Although the micro-finance lending sector is estimated to have funds of around $8.5 billion (£5.5bn) worldwide, Oxfam’s fund is “the first of its kind” to target small firms that have between five and 100 employees.
Nicholas Colloff, the director of strategy and innovation for Oxfam, said the area of investment was known as the “missing middle” between micro finance for individuals and larger firms, and was “seriously undersupported and underdeveloped”.
The fund, which will be managed by Swiss-based micro-finance specialist fund manager Symbiotics, is expected to start making its first investments in the second quarter of this year.
Colloff said: “We are particularly interested in businesses that are related to agriculture and food, and in businesses that are owned by and create employment for women.
“We know at Oxfam that one of the best interventions you can do is improve the quality of women’s lives and their access to assets – because they spend it much more intelligently than men.”
The fund will be invested in a portfolio of debt and equity instruments. Oxfam targets returns of 5 per cent a year and capital preservation.
Roland Dominicé, chief executive of Symbiotics, said: “The SEIIF seeks low risk through high diversification and clear exits, which offers investors both breadth and diversity.”
Colloff he was “confident of getting to our final target of $100m” in three years.