Alternative Sources of Finance: African Youth Fund (AFRICAP)

August 17, 2014

By D E Wasake, Principal, Inachee.com

Basic information

Target:

No specific target – as a “crowd funding” platform, it caters for different entrepreneurs.

Sector focus:

No specific sector but expected to be highly profitable in order to generate sufficient returns for its investors.

Amounts provided:

Varying amounts – as it is a crowd funding platform, the amount provided is driven by what the “crowd”, i.e investors will provide to your business.

Funding type

·         Loans – rates unknown but estimated up to 20% per month) or

·         Equity – the fund takes a % share in your business.

Key criteria

After opening a “corporate borrower” account you are eligible for your business being listed on the crowd funding portal – or “market place” for investors to provide financing (or the fund itself).

Further information

 Tel: +256200905 958

Ham Towers, Makerere Hill Rd, Kampala, Uganda

https://africayouthfund.com/contact/

 

Who is behind the venture?

The venture which is a recognized investment club by Capital Markets Authority works this way in summary:

A: Investors put in their money into the fund

An investor seeking a return buys/invests in the different investment plans .Currently 3 types:

·         Madiba – Freedom from bills

·         Enkoni – access to loans up to 2.5 x your investment amount (minimum of 100k for 3 months)

·         Yinziga – Invest between Shs. 10k – 100m and get returns of 1- 20% per month.

The investments are secured by a promissory note issued by the fund to the investor.

B: Fund provides this money to entrepreneurs seeking funding.

This is done via its crowd funding platform or “market place”. It is expected that the cost to the entrepreneur will be higher than the minimum guaranteed to the investor.

Hence if for example the fund is providing a minimum of 5% per month to the investor, you the entrepreneur will need to pay interest of say 10% per month (as the fund has administrative costs as well as profit to make).

The key persons behind it are:

·         Gilbert Mutungi – Operations director and co – founder. A statistician trained by Bank of Uganda.

·         Baraza Omaido – Credit manager and co – founder. Helped found many university investment clubs

·         Isaac Kasule – Investment advisor. Helps businesses prepare for funding.

https://africayouthfund.com/about/

What is the application process like?

In their own words:

·         As a business you open a Corporate Borrower Account.

·         You then apply for financing from the Fund. We undertake due diligence on your business.

·         The terms of the investment are discussed and finally your offer to the investors.

·         Your business is then listed in the Market Area and marketed for investors to invest in your business.

·         The Fund as a standalone entity may invest in your business in addition to the other investors committing investments to your business.

 

Our view/tips for success?

1. Crowd funding platform. It is critical that as part of the due diligence or application process you can also “interview” the fund. You need to understand the efforts the fund takes to publicise the “market place” or their crowd funding portal to investors as if there are no investors, you don’t get funded. It is therefore a numbers game – the more investors or general crowd accessing the marketplace, the higher the chance of you being funded. You need to therefore assess the likelihood of the fund attracting sufficient investors via the crowd funding market place.

The fund’s current market place (which we note doesn’t appear regularly updated) can be viewed here:

https://africayouthfund.com/market/

2. Stable and high profits. As the fund needs to pay its investors a fixed return, typically monthly, your business plan and business concept needs to be highly profitable, and hopefully you business is not of a seasonal nature (like agriculture) as you need to generate consistent profit to enable you pay back the fund, so it can pay its investors who need to be given a regular return.

Otherwise best of luck!  If you need further assistance or guidance, contact our team

Disclaimer

Inachee is not an agent or connected to this entity. It is an independent thought leadership and advisory firm.

The information provided is based on our research, experience and if we are able to contact them, by speaking to this entity’s personnel. Whilst we have taken steps to ensure the accuracy of the information presented here, there can be no guarantee that it will remain accurate.

 

Alternative sources of finance: Trade Finance (Equity Bank)

December 31, 2013
By: D E Wasake, FCCA, Principal at Inachee.com
Basic Information:


Target:

Importers,  corporate, wholesalers

Sector focus:

Trade

Amounts provided:

Varying

Funding type

Credit

Requirements

  • Bank account holder for 3 months
  • Active bank account
  • Security if the amount is above UGX 50m(Title deed or house)
  • Registered business
  • Proven record with the bank
  • Specialisation in a line of business
...

Continue reading...
 

Alternative sources of finance: Fanisi Capital

August 2, 2013

By D E Wasake, FCCA, Principal Inachee.com

Basic information

Target:

Early and Growth Stage companies

Sector focus:

  • Agri-Business
  • Healthcare
  • Light Manufacturing
  • Financial Services
  • Oil, Gas & Mining Services

Amounts provided:

$ 50,000 -  $15M

Funding type

Venture Capital

Key criteria

·         Profitability. Whether less than 3 years or more than 3 year’s operations. They need to s...


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Alternative sources of finance: Catalyst Principal Partners

June 23, 2013

By D E Wasake, FCCA, Principal, Inachee.com

Basic information

Target:

Emerging and mid-sized companies

Sector focus:

  • Consumer goods and retail
  • Financial and business services
  • Industrials, manufacturing and value-add processing
  • Technology and telecommunications

.

Amounts provided:

USD5 million to USD 20 million

Funding type

Private equity

Key criteria

  • High growth and profitability
  • Capability to expa...

Continue reading...
 

Alternative sources of finance: Jacana Partners

May 30, 2013

By: D E Wasake, Principal, Inachee.com

Basic information

Target:

Established entity - with three years audited financials and a track record of sales and profits.

In exceptional circumstances early stage businesses and start-ups where management teams have directly relevant prior experience and where the business has a clear route to profitability within a short period

Sector focus:

No sector focus but high interest in financial services, p...


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Alternative sources of finance: Uganda Development Bank (UDB)

March 19, 2013

By: D E Wasake, Principal, Inachee.com

Basic information

Target:

Established entity (with at least 3 years of audited accounts and loan security).

Sector focus:

All key sectors of the Ugandan economy including: (but not limited to) commercial agriculture and agro processing, manufacturing, tourism and housing.

Amounts provided:

Minimum Shs. 50m

Funding type

Loans (and potentially equity) at lower th...


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Alternative sources of finance: United States African Development Foundation (USADF)

November 27, 2012

By: D E Wasake, Principal, Inachee.com

Basic information

Target:

Established Cooperatives, associations and small business (at least 2 years’ audited accounts.)

 

Sector focus:

Agriculture/agro processing

Amounts provided:

Between $50,000 and $250,000.

Funding type

Grant

Key criteria

  • Application from registered/incorporated Ugandan entity(and individuals) that include the...

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Alternative sources of finance: the GEF Small Grants Programme

November 17, 2012

By: D E Wasake, Principal, Inachee.com

Basic information

Target:

Sustainable development

Sector focus:

Sustainable development projects that are aimed at conserving and restoring the environment. This includes capacity development for such projects in the following areas:

  • Biodiversity
  • Climate Change
  • International Waters
  • Land Degradation
  • Sustainable forest management
  • Chemicals

Amounts provided:

The maximum grant amount per projec...


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Alternative sources of finance: Acumen Fund

October 16, 2012

By: D E Wasake, Principal, Inachee.com

Basic information

Target:

Early-mid stage companies - Rarely invest in pure start-up companies.

Sector focus:

Water, Health, Agriculture, Energy, Housing, Education.

Amounts provided:

$200,000 - $2m

Funding type

Mainly shares, debt or quasi equity (loans that have features of shares)

Key criteria

Significant Social Impact
Make a product or...


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Alternative sources of finance: GroFin Uganda

October 4, 2012

By: D E Wasake, Principal, Inachee.com

Basic information


Target:

From start-ups to growing firms managed by the entrepreneur.

Sector focus:

All (except primary agriculture)

Amounts provided:

$50,000 - $1.5m

Funding type

Mainly loans but may take minority shares (where risk is high)

Key criteria

  • Skills/ability of entrepreneur (including; integrity)

  • Ability to gen...


Continue reading...
 

Inachee is not an agent or connected to any of the entities featured. it is an independent thought leadership and advisory firm. The information provided is based on our research and experience. Whilst we have taken steps to ensure the accuracy of the information presented here, there can be no guarantee that it will remain accurate.


"Inachee" and "Inachee for business" are brand names that belong to Inachee Limited a company incorporated in England and Wales. No: 08117725. In Uganda, they are used, with permission.  www.inachee.com

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How we are helping you succeed


Inachee Limited We are an ethical thought leadership firm that is passionate about seeing Ugandan businesses succeed. Our Alternative sources of finance cover both start ups and established business. The sources of funds vary from grants to private equity and venture capital.

Definition of Common terms

  • Venture capital: Funding available primarily for start up companies. The venture capitalist usually takes a % of shares (instead of collateral) and expects to exit in say 5-7 years from the company.
  • Private Equity. Funding available primarily for established business to grow to the next level. The private equity fund also takes a % of shares or might also offer debt or a combination of both. 
  • Equity. A % of shares in a company represents its share capital or sometimes referred to as equity.
  • Find out more from our Questions page.