Swedfund invests in entrepreneurs and businesses in South Sudan
Swedfund invests an additional USD 4 million in loan financing in Kinyeti Venture Capital (Kinyeti), alongside the Norwegian Development finance institution Norfund.
Kinyeti is an investment company established in 2012 as a joint venture between Swedfund and Norfund. Kinyeti’s target is to assist in building the private sector in South Sudan by offering capital to entrepreneurs and to growing businesses which supports job creation.
South Sudan is a country that has struggled to form a viable governing system and has been plagued by widespread corruption, political conflict, and civil war. 82% of the population lives below the poverty line and the economy has been negatively affected by climate change, violence and multiple global crises. The SME sector is still young and emerging from the effects of many years of civil war which wrecked the entire physical infrastructure as well as social and financial systems.
Kinyeti is a strong and resilient partner for investing in a fragile state. The Company has for the last ten years originated deals, supported SMEs with credit financing and created jobs in South Sudan amidst the political and economic instability.
The investment in Kinyeti enables Swedfund to contribute to economic growth and the development of private companies in one of the least developed countries in the world. In addition, we will be able to improve access to scarce financing and value add for SMEs, access to quality products & services and tax generation, says Fredrik Linton, Director Special Operations and Business Development at Swedfund.
Swedfund’s funds will be used primarily to increase Kinyeti’s capital for onward lending and support to SMEs. Key clients are SMEs operating in various sectors (the majority in construction & hospitality) contributing to the reconstruction of the country following years of civil war. Swedfund’s strategic focus in Kinyeti is to develop a long-term growth plan, broaden the investment focus to include other sectors e.g., health care, food and IT (digitalization), and to address Kinyeti’s impact management as well as to support further with TA to drive gender equality.
Swedfund has since its first investment in Kinyeti actively pursued issues related to sustainability and financial viability, and the societal impact has so far been very rewarding in a very fragile environment which is and has been challenging due to civil war.