Over a period of 25 years I started-up, developed and sold a dozen small and medium enterprises in a variety of sectors. As with most entrepreneurs I on numerous occasions approached a bank for start-up and growth finance. Where I did not have the collateral to secure the needed loan I failed in raising the finance notwithstanding my growing track record and entrepreneurial success. In the late nineties I managed to raise start-up and growth finance on three occasions from American and European non-profit developing country business developers. The total amount raised was $500,000 and with this we build a multi-disciplinary energy company that we later sold to international utilities, Electricite de France and Nuon together with senior management.  As part of the energy company we started a division that financed other start-up energy companies in Africa on behalf of the same US non-profit specialist investment service that assisted our start-up. Their model for finance was based on viability and addressed the entrepreneurs needs. It however did not fully address the needs of investors as returns were low due to high costs and write-offs nor was it a sustainable commercial business model that could be scaled and replicated the world over to address the growing need for viability based risk finance in developing countries. It did however deliver excellent development returns. Numerous other small non-profit SME finance models similar to this existed at the time but none addressed the needs of the missing middle in a scale-able, nor financially sustainable way. They were all dependent on continued grant finance which inhibited the development of a growth finance asset class that is widely supported by the finance community.  Recognizing the need in the market I took the decision in 2004 to devote my time to the creation of a commercial for profit business that can address the needs of the ‘missing middle.  At a very early stage of GroFins life we teamed up with Shell Foundation who shared a similar vision to develop a commercial and scale-able solution that can be replicated through-out the developing world.  We firstly defined our SME target market. It was to be entrepreneurs that needed less than a $1 million in finance as above this level the maturity and sophistication of the enterprise appeals to private equity players and corporate financiers. We set the lower limit at $50,000 as below this level the informal nature of the businesses is better suited to microfinance. We developed a finance approach that accommodated the added complexities of working with the entrepreneurs that had limited track record and collateral and in the majority of the cases did not want an equity partner. These entrepreneurs need a viability based risk financier that understand and support their financial needs and assist them with business development assistance through all stages of their business development. Most importantly the finance decision is to be based on the ability of the entrepreneurial team and the viability of the business plan. Our goal was to ensure that nine out of ten businesses we finance become financially sustainable. To achieve this we use an integrated product and service approach that make both appropriate medium term (four to six year) risk finance available as well as ongoing pre- and post investment business development assistance to the investee company.  The GroFin finance instrument of choice is self liquidating. The required risk adjusted return is achieved by structuring a term loan with a market related interest rate in accordance with the cash flow characteristics of the business. In addition to the term loan an incentive is earned based on the turnover of the business to ensure that the transaction return is commensurate with the risk taken. This approach delivers equity type returns but without the usual exit problems that is associated with holding a share position in a small private company. Every GroFin SME client receives business development assistance to ensure a viable business plan is in hand before disbursement of finance followed by further business development after the flow of finance to ensure business profitability and thus repayment in accordance with the sought after transaction return. Through this integrated approach GroFin have to date done 146 transactions, 26% of them start-ups. The average transaction size is USD 358,000 and the average collateral cover is a low 40% with an average transaction term of 50 months. These financed businesses create significant value in the market place. Each transaction creates on average 15 new jobs and the GroFin portfolio companies now employ a total of 4112 personnel with a further 64,500 beneficiaries benefitting directly from the USD 52 million so invested. The cost per job created is a low USD 13,000 per position. The write off rate is less than 5% and more than 95% of the business is in operation which is significantly better than the market average and a true indication of the value of the structured finance and the ongoing business development assistance.  These businesses manufacture and deliver a wide range of goods and services and are all formal businesses that contribute significantly to the local economy. None of this is off course possible without the necessary investment capital and support of numerous investors. To develop an attractive asset class for investors the GroFin model had to deliver both measurable development returns as well as acceptable financial returns. Through two pilot funds established in 2004 GroFin demonstrated the return potential of investing risk finance in SMEs. GroFins target net returns to investors are 5 to 10% net after costs and write-offs to investors in USD terms. Performance to date is in line with modelling with gross portfolio returns between 15 and 20% in the different funds. The average IRR achieved on the first 14 exits is 25% proving wrong the belief that risk finance at this level is not commercially sustainable. A total of 21 investors have invested in GroFin funds and by the end of 2008 funds under management totalled $230 million making GroFin the biggest growth finance fund manager in Africa.  With the support of Shell Foundation and other development partners GroFin developed strong operational capability. The integrated product and service approach GroFin uses is very hands-on calling for local teams that that can work closely with the businesses to assess their needs  and deliver the necessary finance and business development assistance. The GroFin team now numbers 90 people operating  from ten offices in nine countries and has the capacity to do 140 transactions annually at a value of USD 50 million per annum. With annual fund management and services income approaching USD 10 million GroFin is the first profitable stand alone growth finance fund management company of size. The GroFin model delivers value at the market, SME client, investor, employee and shareholder level and it does this in a sector which few thought of as financially viable. It is this performance that makes us strong believers in the future of growth finance as an attractive asset class that can deliver sustainable financial, social and economic results in the ever important developing world SME sector.Over a period of 25 years I started-up, developed and sold a dozen small and medium enterprises in a variety of sectors. As with most entrepreneurs I on numerous occasions approached a bank for start-up and growth finance. Where I did not have the collateral to secure the needed loan I failed in raising the finance notwithstanding my growing track record and entrepreneurial success. In the late nineties I managed to raise start-up and growth finance on three occasions from American and European non-profit developing country business developers. The total amount raised was $500,000 and with this we build a multi-disciplinary energy company that we later sold to international utilities, Electricite de France and Nuon together with senior management.  As part of the energy company we started a division that financed other start-up energy companies in Africa on behalf of the same US non-profit specialist investment service that assisted our start-up. Their model for finance was based on viability and addressed the entrepreneurs needs. It however did not fully address the needs of investors as returns were low due to high costs and write-offs nor was it a sustainable commercial business model that could be scaled and replicated the world over to address the growing need for viability based risk finance in developing countries. It did however deliver excellent development returns. Numerous other small non-profit SME finance models similar to this existed at the time but none addressed the needs of the missing middle in a scale-able, nor financially sustainable way. They were all dependent on continued grant finance which inhibited the development of a growth finance asset class that is widely supported by the finance community.  Recognizing the need in the market I took the decision in 2004 to devote my time to the creation of a commercial for profit business that can address the needs of the ‘missing middle.  At a very early stage of GroFins life we teamed up with Shell Foundation who shared a similar vision to develop a commercial and scale-able solution that can be replicated through-out the developing world.  We firstly defined our SME target market. It was to be entrepreneurs that needed less than a $1 million in finance as above this level the maturity and sophistication of the enterprise appeals to private equity players and corporate financiers. We set the lower limit at $50,000 as below this level the informal nature of the businesses is better suited to microfinance. We developed a finance approach that accommodated the added complexities of working with the entrepreneurs that had limited track record and collateral and in the majority of the cases did not want an equity partner. These entrepreneurs need a viability based risk financier that understand and support their financial needs and assist them with business development assistance through all stages of their business development. Most importantly the finance decision is to be based on the ability of the entrepreneurial team and the viability of the business plan. Our goal was to ensure that nine out of ten businesses we finance become financially sustainable. To achieve this we use an integrated product and service approach that make both appropriate medium term (four to six year) risk finance available as well as ongoing pre- and post investment business development assistance to the investee company.  The GroFin finance instrument of choice is self liquidating. The required risk adjusted return is achieved by structuring a term loan with a market related interest rate in accordance with the cash flow characteristics of the business. In addition to the term loan an incentive is earned based on the turnover of the business to ensure that the transaction return is commensurate with the risk taken. This approach delivers equity type returns but without the usual exit problems that is associated with holding a share position in a small private company. Every GroFin SME client receives business development assistance to ensure a viable business plan is in hand before disbursement of finance followed by further business development after the flow of finance to ensure business profitability and thus repayment in accordance with the sought after transaction return. Through this integrated approach GroFin have to date done 146 transactions, 26% of them start-ups. The average transaction size is USD 358,000 and the average collateral cover is a low 40% with an average transaction term of 50 months. These financed businesses create significant value in the market place. Each transaction creates on average 15 new jobs and the GroFin portfolio companies now employ a total of 4112 personnel with a further 64,500 beneficiaries benefitting directly from the USD 52 million so invested. The cost per job created is a low USD 13,000 per position. The write off rate is less than 5% and more than 95% of the business is in operation which is significantly better than the market average and a true indication of the value of the structured finance and the ongoing business development assistance.  These businesses manufacture and deliver a wide range of goods and services and are all formal businesses that contribute significantly to the local economy. None of this is off course possible without the necessary investment capital and support of numerous investors. To develop an attractive asset class for investors the GroFin model had to deliver both measurable development returns as well as acceptable financial returns. Through two pilot funds established in 2004 GroFin demonstrated the return potential of investing risk finance in SMEs. GroFins target net returns to investors are 5 to 10% net after costs and write-offs to investors in USD terms. Performance to date is in line with modelling with gross portfolio returns between 15 and 20% in the different funds. The average IRR achieved on the first 14 exits is 25% proving wrong the belief that risk finance at this level is not commercially sustainable. A total of 21 investors have invested in GroFin funds and by the end of 2008 funds under management totalled $230 million making GroFin the biggest growth finance fund manager in Africa.  With the support of Shell Foundation and other development partners GroFin developed strong operational capability. The integrated product and service approach GroFin uses is very hands-on calling for local teams that that can work closely with the businesses to assess their needs  and deliver the necessary finance and business development assistance. The GroFin team now numbers 90 people operating  from ten offices in nine countries and has the capacity to do 140 transactions annually at a value of USD 50 million per annum. With annual fund management and services income approaching USD 10 million GroFin is the first profitable stand alone growth finance fund management company of size. The GroFin model delivers value at the market, SME client, investor, employee and shareholder level and it does this in a sector which few thought of as financially viable. It is this performance that makes us strong believers in the future of growth finance as an attractive asset class that can deliver sustainable financial, social and economic results in the ever important developing world SME sector.Over a period of 25 years I started-up, developed and sold a dozen small and medium enterprises in a variety of sectors. As with most entrepreneurs I on numerous occasions approached a bank for start-up and growth finance. Where I did not have the collateral to secure the needed loan I failed in raising the finance notwithstanding my growing track record and entrepreneurial success. In the late nineties I managed to raise start-up and growth finance on three occasions from American and European non-profit developing country business developers. The total amount raised was $500,000 and with this we build a multi-disciplinary energy company that we later sold to international utilities, Electricite de France and Nuon together with senior management.  As part of the energy company we started a division that financed other start-up energy companies in Africa on behalf of the same US non-profit specialist investment service that assisted our start-up. Their model for finance was based on viability and addressed the entrepreneurs needs. It however did not fully address the needs of investors as returns were low due to high costs and write-offs nor was it a sustainable commercial business model that could be scaled and replicated the world over to address the growing need for viability based risk finance in developing countries. It did however deliver excellent development returns. Numerous other small non-profit SME finance models similar to this existed at the time but none addressed the needs of the missing middle in a scale-able, nor financially sustainable way. They were all dependent on continued grant finance which inhibited the development of a growth finance asset class that is widely supported by the finance community.  Recognizing the need in the market I took the decision in 2004 to devote my time to the creation of a commercial for profit business that can address the needs of the ‘missing middle.  At a very early stage of GroFins life we teamed up with Shell Foundation who shared a similar vision to develop a commercial and scale-able solution that can be replicated through-out the developing world.  We firstly defined our SME target market. It was to be entrepreneurs that needed less than a $1 million in finance as above this level the maturity and sophistication of the enterprise appeals to private equity players and corporate financiers. We set the lower limit at $50,000 as below this level the informal nature of the businesses is better suited to microfinance. We developed a finance approach that accommodated the added complexities of working with the entrepreneurs that had limited track record and collateral and in the majority of the cases did not want an equity partner. These entrepreneurs need a viability based risk financier that understand and support their financial needs and assist them with business development assistance through all stages of their business development. Most importantly the finance decision is to be based on the ability of the entrepreneurial team and the viability of the business plan. Our goal was to ensure that nine out of ten businesses we finance become financially sustainable. To achieve this we use an integrated product and service approach that make both appropriate medium term (four to six year) risk finance available as well as ongoing pre- and post investment business development assistance to the investee company.  The GroFin finance instrument of choice is self liquidating. The required risk adjusted return is achieved by structuring a term loan with a market related interest rate in accordance with the cash flow characteristics of the business. In addition to the term loan an incentive is earned based on the turnover of the business to ensure that the transaction return is commensurate with the risk taken. This approach delivers equity type returns but without the usual exit problems that is associated with holding a share position in a small private company. Every GroFin SME client receives business development assistance to ensure a viable business plan is in hand before disbursement of finance followed by further business development after the flow of finance to ensure business profitability and thus repayment in accordance with the sought after transaction return. Through this integrated approach GroFin have to date done 146 transactions, 26% of them start-ups. The average transaction size is USD 358,000 and the average collateral cover is a low 40% with an average transaction term of 50 months. These financed businesses create significant value in the market place. Each transaction creates on average 15 new jobs and the GroFin portfolio companies now employ a total of 4112 personnel with a further 64,500 beneficiaries benefitting directly from the USD 52 million so invested. The cost per job created is a low USD 13,000 per position. The write off rate is less than 5% and more than 95% of the business is in operation which is significantly better than the market average and a true indication of the value of the structured finance and the ongoing business development assistance.  These businesses manufacture and deliver a wide range of goods and services and are all formal businesses that contribute significantly to the local economy. None of this is off course possible without the necessary investment capital and support of numerous investors. To develop an attractive asset class for investors the GroFin model had to deliver both measurable development returns as well as acceptable financial returns. Through two pilot funds established in 2004 GroFin demonstrated the return potential of investing risk finance in SMEs. GroFins target net returns to investors are 5 to 10% net after costs and write-offs to investors in USD terms. Performance to date is in line with modelling with gross portfolio returns between 15 and 20% in the different funds. The average IRR achieved on the first 14 exits is 25% proving wrong the belief that risk finance at this level is not commercially sustainable. A total of 21 investors have invested in GroFin funds and by the end of 2008 funds under management totalled $230 million making GroFin the biggest growth finance fund manager in Africa.  With the support of Shell Foundation and other development partners GroFin developed strong operational capability. The integrated product and service approach GroFin uses is very hands-on calling for local teams that that can work closely with the businesses to assess their needs  and deliver the necessary finance and business development assistance. The GroFin team now numbers 90 people operating  from ten offices in nine countries and has the capacity to do 140 transactions annually at a value of USD 50 million per annum. With annual fund management and services income approaching USD 10 million GroFin is the first profitable stand alone growth finance fund management company of size. The GroFin model delivers value at the market, SME client, investor, employee and shareholder level and it does this in a sector which few thought of as financially viable. It is this performance that makes us strong believers in the future of growth finance as an attractive asset class that can deliver sustainable financial, social and economic results in the ever important developing world SME sector.Over a period of 25 years I started-up, developed and sold a dozen small and medium enterprises in a variety of sectors. As with most entrepreneurs I on numerous occasions approached a bank for start-up and growth finance. Where I did not have the collateral to secure the needed loan I failed in raising the finance notwithstanding my growing track record and entrepreneurial success. In the late nineties I managed to raise start-up and growth finance on three occasions from American and European non-profit developing country business developers. The total amount raised was $500,000 and with this we build a multi-disciplinary energy company that we later sold to international utilities, Electricite de France and Nuon together with senior management.  As part of the energy company we started a division that financed other start-up energy companies in Africa on behalf of the same US non-profit specialist investment service that assisted our start-up. Their model for finance was based on viability and addressed the entrepreneurs needs. It however did not fully address the needs of investors as returns were low due to high costs and write-offs nor was it a sustainable commercial business model that could be scaled and replicated the world over to address the growing need for viability based risk finance in developing countries. It did however deliver excellent development returns. Numerous other small non-profit SME finance models similar to this existed at the time but none addressed the needs of the missing middle in a scale-able, nor financially sustainable way. They were all dependent on continued grant finance which inhibited the development of a growth finance asset class that is widely supported by the finance community.  Recognizing the need in the market I took the decision in 2004 to devote my time to the creation of a commercial for profit business that can address the needs of the ‘missing middle.  At a very early stage of GroFins life we teamed up with Shell Foundation who shared a similar vision to develop a commercial and scale-able solution that can be replicated through-out the developing world.  We firstly defined our SME target market. It was to be entrepreneurs that needed less than a $1 million in finance as above this level the maturity and sophistication of the enterprise appeals to private equity players and corporate financiers. We set the lower limit at $50,000 as below this level the informal nature of the businesses is better suited to microfinance. We developed a finance approach that accommodated the added complexities of working with the entrepreneurs that had limited track record and collateral and in the majority of the cases did not want an equity partner. These entrepreneurs need a viability based risk financier that understand and support their financial needs and assist them with business development assistance through all stages of their business development. Most importantly the finance decision is to be based on the ability of the entrepreneurial team and the viability of the business plan. Our goal was to ensure that nine out of ten businesses we finance become financially sustainable. To achieve this we use an integrated product and service approach that make both appropriate medium term (four to six year) risk finance available as well as ongoing pre- and post investment business development assistance to the investee company.  The GroFin finance instrument of choice is self liquidating. The required risk adjusted return is achieved by structuring a term loan with a market related interest rate in accordance with the cash flow characteristics of the business. In addition to the term loan an incentive is earned based on the turnover of the business to ensure that the transaction return is commensurate with the risk taken. This approach delivers equity type returns but without the usual exit problems that is associated with holding a share position in a small private company. Every GroFin SME client receives business development assistance to ensure a viable business plan is in hand before disbursement of finance followed by further business development after the flow of finance to ensure business profitability and thus repayment in accordance with the sought after transaction return. Through this integrated approach GroFin have to date done 146 transactions, 26% of them start-ups. The average transaction size is USD 358,000 and the average collateral cover is a low 40% with an average transaction term of 50 months. These financed businesses create significant value in the market place. Each transaction creates on average 15 new jobs and the GroFin portfolio companies now employ a total of 4112 personnel with a further 64,500 beneficiaries benefitting directly from the USD 52 million so invested. The cost per job created is a low USD 13,000 per position. The write off rate is less than 5% and more than 95% of the business is in operation which is significantly better than the market average and a true indication of the value of the structured finance and the ongoing business development assistance.  These businesses manufacture and deliver a wide range of goods and services and are all formal businesses that contribute significantly to the local economy. None of this is off course possible without the necessary investment capital and support of numerous investors. To develop an attractive asset class for investors the GroFin model had to deliver both measurable development returns as well as acceptable financial returns. Through two pilot funds established in 2004 GroFin demonstrated the return potential of investing risk finance in SMEs. GroFins target net returns to investors are 5 to 10% net after costs and write-offs to investors in USD terms. Performance to date is in line with modelling with gross portfolio returns between 15 and 20% in the different funds. The average IRR achieved on the first 14 exits is 25% proving wrong the belief that risk finance at this level is not commercially sustainable. A total of 21 investors have invested in GroFin funds and by the end of 2008 funds under management totalled $230 million making GroFin the biggest growth finance fund manager in Africa.  With the support of Shell Foundation and other development partners GroFin developed strong operational capability. The integrated product and service approach GroFin uses is very hands-on calling for local teams that that can work closely with the businesses to assess their needs  and deliver the necessary finance and business development assistance. The GroFin team now numbers 90 people operating  from ten offices in nine countries and has the capacity to do 140 transactions annually at a value of USD 50 million per annum. With annual fund management and services income approaching USD 10 million GroFin is the first profitable stand alone growth finance fund management company of size. The GroFin model delivers value at the market, SME client, investor, employee and shareholder level and it does this in a sector which few thought of as financially viable. It is this performance that makes us strong believers in the future of growth finance as an attractive asset class that can deliver sustainable financial, social and economic results in the ever important developing world SME sector.Over a period of 25 years I started-up, developed and sold a dozen small and medium enterprises in a variety of sectors. As with most entrepreneurs I on numerous occasions approached a bank for start-up and growth finance. Where I did not have the collateral to secure the needed loan I failed in raising the finance notwithstanding my growing track record and entrepreneurial success. In the late nineties I managed to raise start-up and growth finance on three occasions from American and European non-profit developing country business developers. The total amount raised was $500,000 and with this we build a multi-disciplinary energy company that we later sold to international utilities, Electricite de France and Nuon together with senior management.  As part of the energy company we started a division that financed other start-up energy companies in Africa on behalf of the same US non-profit specialist investment service that assisted our start-up. Their model for finance was based on viability and addressed the entrepreneurs needs. It however did not fully address the needs of investors as returns were low due to high costs and write-offs nor was it a sustainable commercial business model that could be scaled and replicated the world over to address the growing need for viability based risk finance in developing countries. It did however deliver excellent development returns. Numerous other small non-profit SME finance models similar to this existed at the time but none addressed the needs of the missing middle in a scale-able, nor financially sustainable way. They were all dependent on continued grant finance which inhibited the development of a growth finance asset class that is widely supported by the finance community.  Recognizing the need in the market I took the decision in 2004 to devote my time to the creation of a commercial for profit business that can address the needs of the ‘missing middle.  At a very early stage of GroFins life we teamed up with Shell Foundation who shared a similar vision to develop a commercial and scale-able solution that can be replicated through-out the developing world.  We firstly defined our SME target market. It was to be entrepreneurs that needed less than a $1 million in finance as above this level the maturity and sophistication of the enterprise appeals to private equity players and corporate financiers. We set the lower limit at $50,000 as below this level the informal nature of the businesses is better suited to microfinance. We developed a finance approach that accommodated the added complexities of working with the entrepreneurs that had limited track record and collateral and in the majority of the cases did not want an equity partner. These entrepreneurs need a viability based risk financier that understand and support their financial needs and assist them with business development assistance through all stages of their business development. Most importantly the finance decision is to be based on the ability of the entrepreneurial team and the viability of the business plan. Our goal was to ensure that nine out of ten businesses we finance become financially sustainable. To achieve this we use an integrated product and service approach that make both appropriate medium term (four to six year) risk finance available as well as ongoing pre- and post investment business development assistance to the investee company.  The GroFin finance instrument of choice is self liquidating. The required risk adjusted return is achieved by structuring a term loan with a market related interest rate in accordance with the cash flow characteristics of the business. In addition to the term loan an incentive is earned based on the turnover of the business to ensure that the transaction return is commensurate with the risk taken. This approach delivers equity type returns but without the usual exit problems that is associated with holding a share position in a small private company. Every GroFin SME client receives business development assistance to ensure a viable business plan is in hand before disbursement of finance followed by further business development after the flow of finance to ensure business profitability and thus repayment in accordance with the sought after transaction return. Through this integrated approach GroFin have to date done 146 transactions, 26% of them start-ups. The average transaction size is USD 358,000 and the average collateral cover is a low 40% with an average transaction term of 50 months. These financed businesses create significant value in the market place. Each transaction creates on average 15 new jobs and the GroFin portfolio companies now employ a total of 4112 personnel with a further 64,500 beneficiaries benefitting directly from the USD 52 million so invested. The cost per job created is a low USD 13,000 per position. The write off rate is less than 5% and more than 95% of the business is in operation which is significantly better than the market average and a true indication of the value of the structured finance and the ongoing business development assistance.  These businesses manufacture and deliver a wide range of goods and services and are all formal businesses that contribute significantly to the local economy. None of this is off course possible without the necessary investment capital and support of numerous investors. To develop an attractive asset class for investors the GroFin model had to deliver both measurable development returns as well as acceptable financial returns. Through two pilot funds established in 2004 GroFin demonstrated the return potential of investing risk finance in SMEs. GroFins target net returns to investors are 5 to 10% net after costs and write-offs to investors in USD terms. Performance to date is in line with modelling with gross portfolio returns between 15 and 20% in the different funds. The average IRR achieved on the first 14 exits is 25% proving wrong the belief that risk finance at this level is not commercially sustainable. A total of 21 investors have invested in GroFin funds and by the end of 2008 funds under management totalled $230 million making GroFin the biggest growth finance fund manager in Africa.  With the support of Shell Foundation and other development partners GroFin developed strong operational capability. The integrated product and service approach GroFin uses is very hands-on calling for local teams that that can work closely with the businesses to assess their needs  and deliver the necessary finance and business development assistance. The GroFin team now numbers 90 people operating  from ten offices in nine countries and has the capacity to do 140 transactions annually at a value of USD 50 million per annum. With annual fund management and services income approaching USD 10 million GroFin is the first profitable stand alone growth finance fund management company of size. The GroFin model delivers value at the market, SME client, investor, employee and shareholder level and it does this in a sector which few thought of as financially viable. It is this performance that makes us strong believers in the future of growth finance as an attractive asset class that can deliver sustainable financial, social and economic results in the ever important developing world SME sector.Over a period of 25 years I started-up, developed and sold a dozen small and medium enterprises in a variety of sectors. As with most entrepreneurs I on numerous occasions approached a bank for start-up and growth finance. Where I did not have the collateral to secure the needed loan I failed in raising the finance notwithstanding my growing track record and entrepreneurial success. In the late nineties I managed to raise start-up and growth finance on three occasions from American and European non-profit developing country business developers. The total amount raised was $500,000 and with this we build a multi-disciplinary energy company that we later sold to international utilities, Electricite de France and Nuon together with senior management.  As part of the energy company we started a division that financed other start-up energy companies in Africa on behalf of the same US non-profit specialist investment service that assisted our start-up. Their model for finance was based on viability and addressed the entrepreneurs needs. It however did not fully address the needs of investors as returns were low due to high costs and write-offs nor was it a sustainable commercial business model that could be scaled and replicated the world over to address the growing need for viability based risk finance in developing countries. It did however deliver excellent development returns. Numerous other small non-profit SME finance models similar to this existed at the time but none addressed the needs of the missing middle in a scale-able, nor financially sustainable way. They were all dependent on continued grant finance which inhibited the development of a growth finance asset class that is widely supported by the finance community.  Recognizing the need in the market I took the decision in 2004 to devote my time to the creation of a commercial for profit business that can address the needs of the ‘missing middle.  At a very early stage of GroFins life we teamed up with Shell Foundation who shared a similar vision to develop a commercial and scale-able solution that can be replicated through-out the developing world.  We firstly defined our SME target market. It was to be entrepreneurs that needed less than a $1 million in finance as above this level the maturity and sophistication of the enterprise appeals to private equity players and corporate financiers. We set the lower limit at $50,000 as below this level the informal nature of the businesses is better suited to microfinance. We developed a finance approach that accommodated the added complexities of working with the entrepreneurs that had limited track record and collateral and in the majority of the cases did not want an equity partner. These entrepreneurs need a viability based risk financier that understand and support their financial needs and assist them with business development assistance through all stages of their business development. Most importantly the finance decision is to be based on the ability of the entrepreneurial team and the viability of the business plan. Our goal was to ensure that nine out of ten businesses we finance become financially sustainable. To achieve this we use an integrated product and service approach that make both appropriate medium term (four to six year) risk finance available as well as ongoing pre- and post investment business development assistance to the investee company.  The GroFin finance instrument of choice is self liquidating. The required risk adjusted return is achieved by structuring a term loan with a market related interest rate in accordance with the cash flow characteristics of the business. In addition to the term loan an incentive is earned based on the turnover of the business to ensure that the transaction return is commensurate with the risk taken. This approach delivers equity type returns but without the usual exit problems that is associated with holding a share position in a small private company. Every GroFin SME client receives business development assistance to ensure a viable business plan is in hand before disbursement of finance followed by further business development after the flow of finance to ensure business profitability and thus repayment in accordance with the sought after transaction return. Through this integrated approach GroFin have to date done 146 transactions, 26% of them start-ups. The average transaction size is USD 358,000 and the average collateral cover is a low 40% with an average transaction term of 50 months. These financed businesses create significant value in the market place. Each transaction creates on average 15 new jobs and the GroFin portfolio companies now employ a total of 4112 personnel with a further 64,500 beneficiaries benefitting directly from the USD 52 million so invested. The cost per job created is a low USD 13,000 per position. The write off rate is less than 5% and more than 95% of the business is in operation which is significantly better than the market average and a true indication of the value of the structured finance and the ongoing business development assistance.  These businesses manufacture and deliver a wide range of goods and services and are all formal businesses that contribute significantly to the local economy. None of this is off course possible without the necessary investment capital and support of numerous investors. To develop an attractive asset class for investors the GroFin model had to deliver both measurable development returns as well as acceptable financial returns. Through two pilot funds established in 2004 GroFin demonstrated the return potential of investing risk finance in SMEs. GroFins target net returns to investors are 5 to 10% net after costs and write-offs to investors in USD terms. Performance to date is in line with modelling with gross portfolio returns between 15 and 20% in the different funds. The average IRR achieved on the first 14 exits is 25% proving wrong the belief that risk finance at this level is not commercially sustainable. A total of 21 investors have invested in GroFin funds and by the end of 2008 funds under management totalled $230 million making GroFin the biggest growth finance fund manager in Africa.  With the support of Shell Foundation and other development partners GroFin developed strong operational capability. The integrated product and service approach GroFin uses is very hands-on calling for local teams that that can work closely with the businesses to assess their needs  and deliver the necessary finance and business development assistance. The GroFin team now numbers 90 people operating  from ten offices in nine countries and has the capacity to do 140 transactions annually at a value of USD 50 million per annum. With annual fund management and services income approaching USD 10 million GroFin is the first profitable stand alone growth finance fund management company of size. The GroFin model delivers value at the market, SME client, investor, employee and shareholder level and it does this in a sector which few thought of as financially viable. It is this performance that makes us strong believers in the future of growth finance as an attractive asset class that can deliver sustainable financial, social and economic results in the ever important developing world SME sector.Over a period of 25 years I started-up, developed and sold a dozen small and medium enterprises in a variety of sectors. As with most entrepreneurs I on numerous occasions approached a bank for start-up and growth finance. Where I did not have the collateral to secure the needed loan I failed in raising the finance notwithstanding my growing track record and entrepreneurial success. In the late nineties I managed to raise start-up and growth finance on three occasions from American and European non-profit developing country business developers. The total amount raised was $500,000 and with this we build a multi-disciplinary energy company that we later sold to international utilities, Electricite de France and Nuon together with senior management.  As part of the energy company we started a division that financed other start-up energy companies in Africa on behalf of the same US non-profit specialist investment service that assisted our start-up. Their model for finance was based on viability and addressed the entrepreneurs needs. It however did not fully address the needs of investors as returns were low due to high costs and write-offs nor was it a sustainable commercial business model that could be scaled and replicated the world over to address the growing need for viability based risk finance in developing countries. It did however deliver excellent development returns. Numerous other small non-profit SME finance models similar to this existed at the time but none addressed the needs of the missing middle in a scale-able, nor financially sustainable way. They were all dependent on continued grant finance which inhibited the development of a growth finance asset class that is widely supported by the finance community.  Recognizing the need in the market I took the decision in 2004 to devote my time to the creation of a commercial for profit business that can address the needs of the ‘missing middle.  At a very early stage of GroFins life we teamed up with Shell Foundation who shared a similar vision to develop a commercial and scale-able solution that can be replicated through-out the developing world.  We firstly defined our SME target market. It was to be entrepreneurs that needed less than a $1 million in finance as above this level the maturity and sophistication of the enterprise appeals to private equity players and corporate financiers. We set the lower limit at $50,000 as below this level the informal nature of the businesses is better suited to microfinance. We developed a finance approach that accommodated the added complexities of working with the entrepreneurs that had limited track record and collateral and in the majority of the cases did not want an equity partner. These entrepreneurs need a viability based risk financier that understand and support their financial needs and assist them with business development assistance through all stages of their business development. Most importantly the finance decision is to be based on the ability of the entrepreneurial team and the viability of the business plan. Our goal was to ensure that nine out of ten businesses we finance become financially sustainable. To achieve this we use an integrated product and service approach that make both appropriate medium term (four to six year) risk finance available as well as ongoing pre- and post investment business development assistance to the investee company.  The GroFin finance instrument of choice is self liquidating. The required risk adjusted return is achieved by structuring a term loan with a market related interest rate in accordance with the cash flow characteristics of the business. In addition to the term loan an incentive is earned based on the turnover of the business to ensure that the transaction return is commensurate with the risk taken. This approach delivers equity type returns but without the usual exit problems that is associated with holding a share position in a small private company. Every GroFin SME client receives business development assistance to ensure a viable business plan is in hand before disbursement of finance followed by further business development after the flow of finance to ensure business profitability and thus repayment in accordance with the sought after transaction return. Through this integrated approach GroFin have to date done 146 transactions, 26% of them start-ups. The average transaction size is USD 358,000 and the average collateral cover is a low 40% with an average transaction term of 50 months. These financed businesses create significant value in the market place. Each transaction creates on average 15 new jobs and the GroFin portfolio companies now employ a total of 4112 personnel with a further 64,500 beneficiaries benefitting directly from the USD 52 million so invested. The cost per job created is a low USD 13,000 per position. The write off rate is less than 5% and more than 95% of the business is in operation which is significantly better than the market average and a true indication of the value of the structured finance and the ongoing business development assistance.  These businesses manufacture and deliver a wide range of goods and services and are all formal businesses that contribute significantly to the local economy. None of this is off course possible without the necessary investment capital and support of numerous investors. To develop an attractive asset class for investors the GroFin model had to deliver both measurable development returns as well as acceptable financial returns. Through two pilot funds established in 2004 GroFin demonstrated the return potential of investing risk finance in SMEs. GroFins target net returns to investors are 5 to 10% net after costs and write-offs to investors in USD terms. Performance to date is in line with modelling with gross portfolio returns between 15 and 20% in the different funds. The average IRR achieved on the first 14 exits is 25% proving wrong the belief that risk finance at this level is not commercially sustainable. A total of 21 investors have invested in GroFin funds and by the end of 2008 funds under management totalled $230 million making GroFin the biggest growth finance fund manager in Africa.  With the support of Shell Foundation and other development partners GroFin developed strong operational capability. The integrated product and service approach GroFin uses is very hands-on calling for local teams that that can work closely with the businesses to assess their needs  and deliver the necessary finance and business development assistance. The GroFin team now numbers 90 people operating  from ten offices in nine countries and has the capacity to do 140 transactions annually at a value of USD 50 million per annum. With annual fund management and services income approaching USD 10 million GroFin is the first profitable stand alone growth finance fund management company of size. The GroFin model delivers value at the market, SME client, investor, employee and shareholder level and it does this in a sector which few thought of as financially viable. It is this performance that makes us strong believers in the future of growth finance as an attractive asset class that can deliver sustainable financial, social and economic results in the ever important developing world SME sector.Over a period of 25 years I started-up, developed and sold a dozen small and medium enterprises in a variety of sectors. As with most entrepreneurs I on numerous occasions approached a bank for start-up and growth finance. Where I did not have the collateral to secure the needed loan I failed in raising the finance notwithstanding my growing track record and entrepreneurial success. In the late nineties I managed to raise start-up and growth finance on three occasions from American and European non-profit developing country business developers. The total amount raised was $500,000 and with this we build a multi-disciplinary energy company that we later sold to international utilities, Electricite de France and Nuon together with senior management.  As part of the energy company we started a division that financed other start-up energy companies in Africa on behalf of the same US non-profit specialist investment service that assisted our start-up. Their model for finance was based on viability and addressed the entrepreneurs needs. It however did not fully address the needs of investors as returns were low due to high costs and write-offs nor was it a sustainable commercial business model that could be scaled and replicated the world over to address the growing need for viability based risk finance in developing countries. It did however deliver excellent development returns. Numerous other small non-profit SME finance models similar to this existed at the time but none addressed the needs of the missing middle in a scale-able, nor financially sustainable way. They were all dependent on continued grant finance which inhibited the development of a growth finance asset class that is widely supported by the finance community.  Recognizing the need in the market I took the decision in 2004 to devote my time to the creation of a commercial for profit business that can address the needs of the ‘missing middle.  At a very early stage of GroFins life we teamed up with Shell Foundation who shared a similar vision to develop a commercial and scale-able solution that can be replicated through-out the developing world.  We firstly defined our SME target market. It was to be entrepreneurs that needed less than a $1 million in finance as above this level the maturity and sophistication of the enterprise appeals to private equity players and corporate financiers. We set the lower limit at $50,000 as below this level the informal nature of the businesses is better suited to microfinance. We developed a finance approach that accommodated the added complexities of working with the entrepreneurs that had limited track record and collateral and in the majority of the cases did not want an equity partner. These entrepreneurs need a viability based risk financier that understand and support their financial needs and assist them with business development assistance through all stages of their business development. Most importantly the finance decision is to be based on the ability of the entrepreneurial team and the viability of the business plan. Our goal was to ensure that nine out of ten businesses we finance become financially sustainable. To achieve this we use an integrated product and service approach that make both appropriate medium term (four to six year) risk finance available as well as ongoing pre- and post investment business development assistance to the investee company.  The GroFin finance instrument of choice is self liquidating. The required risk adjusted return is achieved by structuring a term loan with a market related interest rate in accordance with the cash flow characteristics of the business. In addition to the term loan an incentive is earned based on the turnover of the business to ensure that the transaction return is commensurate with the risk taken. This approach delivers equity type returns but without the usual exit problems that is associated with holding a share position in a small private company. Every GroFin SME client receives business development assistance to ensure a viable business plan is in hand before disbursement of finance followed by further business development after the flow of finance to ensure business profitability and thus repayment in accordance with the sought after transaction return. Through this integrated approach GroFin have to date done 146 transactions, 26% of them start-ups. The average transaction size is USD 358,000 and the average collateral cover is a low 40% with an average transaction term of 50 months. These financed businesses create significant value in the market place. Each transaction creates on average 15 new jobs and the GroFin portfolio companies now employ a total of 4112 personnel with a further 64,500 beneficiaries benefitting directly from the USD 52 million so invested. The cost per job created is a low USD 13,000 per position. The write off rate is less than 5% and more than 95% of the business is in operation which is significantly better than the market average and a true indication of the value of the structured finance and the ongoing business development assistance.  These businesses manufacture and deliver a wide range of goods and services and are all formal businesses that contribute significantly to the local economy. None of this is off course possible without the necessary investment capital and support of numerous investors. To develop an attractive asset class for investors the GroFin model had to deliver both measurable development returns as well as acceptable financial returns. Through two pilot funds established in 2004 GroFin demonstrated the return potential of investing risk finance in SMEs. GroFins target net returns to investors are 5 to 10% net after costs and write-offs to investors in USD terms. Performance to date is in line with modelling with gross portfolio returns between 15 and 20% in the different funds. The average IRR achieved on the first 14 exits is 25% proving wrong the belief that risk finance at this level is not commercially sustainable. A total of 21 investors have invested in GroFin funds and by the end of 2008 funds under management totalled $230 million making GroFin the biggest growth finance fund manager in Africa.  With the support of Shell Foundation and other development partners GroFin developed strong operational capability. The integrated product and service approach GroFin uses is very hands-on calling for local teams that that can work closely with the businesses to assess their needs  and deliver the necessary finance and business development assistance. The GroFin team now numbers 90 people operating  from ten offices in nine countries and has the capacity to do 140 transactions annually at a value of USD 50 million per annum. With annual fund management and services income approaching USD 10 million GroFin is the first profitable stand alone growth finance fund management company of size. The GroFin model delivers value at the market, SME client, investor, employee and shareholder level and it does this in a sector which few thought of as financially viable. It is this performance that makes us strong believers in the future of growth finance as an attractive asset class that can deliver sustainable financial, social and economic results in the ever important developing world SME sector.Over a period of 25 years I started-up, developed and sold a dozen small and medium enterprises in a variety of sectors. As with most entrepreneurs I on numerous occasions approached a bank for start-up and growth finance. Where I did not have the collateral to secure the needed loan I failed in raising the finance notwithstanding my growing track record and entrepreneurial success. In the late nineties I managed to raise start-up and growth finance on three occasions from American and European non-profit developing country business developers. The total amount raised was $500,000 and with this we build a multi-disciplinary energy company that we later sold to international utilities, Electricite de France and Nuon together with senior management.  As part of the energy company we started a division that financed other start-up energy companies in Africa on behalf of the same US non-profit specialist investment service that assisted our start-up. Their model for finance was based on viability and addressed the entrepreneurs needs. It however did not fully address the needs of investors as returns were low due to high costs and write-offs nor was it a sustainable commercial business model that could be scaled and replicated the world over to address the growing need for viability based risk finance in developing countries. It did however deliver excellent development returns. Numerous other small non-profit SME finance models similar to this existed at the time but none addressed the needs of the missing middle in a scale-able, nor financially sustainable way. They were all dependent on continued grant finance which inhibited the development of a growth finance asset class that is widely supported by the finance community.  Recognizing the need in the market I took the decision in 2004 to devote my time to the creation of a commercial for profit business that can address the needs of the ‘missing middle.  At a very early stage of GroFins life we teamed up with Shell Foundation who shared a similar vision to develop a commercial and scale-able solution that can be replicated through-out the developing world.  We firstly defined our SME target market. It was to be entrepreneurs that needed less than a $1 million in finance as above this level the maturity and sophistication of the enterprise appeals to private equity players and corporate financiers. We set the lower limit at $50,000 as below this level the informal nature of the businesses is better suited to microfinance. We developed a finance approach that accommodated the added complexities of working with the entrepreneurs that had limited track record and collateral and in the majority of the cases did not want an equity partner. These entrepreneurs need a viability based risk financier that understand and support their financial needs and assist them with business development assistance through all stages of their business development. Most importantly the finance decision is to be based on the ability of the entrepreneurial team and the viability of the business plan. Our goal was to ensure that nine out of ten businesses we finance become financially sustainable. To achieve this we use an integrated product and service approach that make both appropriate medium term (four to six year) risk finance available as well as ongoing pre- and post investment business development assistance to the investee company.  The GroFin finance instrument of choice is self liquidating. The required risk adjusted return is achieved by structuring a term loan with a market related interest rate in accordance with the cash flow characteristics of the business. In addition to the term loan an incentive is earned based on the turnover of the business to ensure that the transaction return is commensurate with the risk taken. This approach delivers equity type returns but without the usual exit problems that is associated with holding a share position in a small private company. Every GroFin SME client receives business development assistance to ensure a viable business plan is in hand before disbursement of finance followed by further business development after the flow of finance to ensure business profitability and thus repayment in accordance with the sought after transaction return. Through this integrated approach GroFin have to date done 146 transactions, 26% of them start-ups. The average transaction size is USD 358,000 and the average collateral cover is a low 40% with an average transaction term of 50 months. These financed businesses create significant value in the market place. Each transaction creates on average 15 new jobs and the GroFin portfolio companies now employ a total of 4112 personnel with a further 64,500 beneficiaries benefitting directly from the USD 52 million so invested. The cost per job created is a low USD 13,000 per position. The write off rate is less than 5% and more than 95% of the business is in operation which is significantly better than the market average and a true indication of the value of the structured finance and the ongoing business development assistance.  These businesses manufacture and deliver a wide range of goods and services and are all formal businesses that contribute significantly to the local economy. None of this is off course possible without the necessary investment capital and support of numerous investors. To develop an attractive asset class for investors the GroFin model had to deliver both measurable development returns as well as acceptable financial returns. Through two pilot funds established in 2004 GroFin demonstrated the return potential of investing risk finance in SMEs. GroFins target net returns to investors are 5 to 10% net after costs and write-offs to investors in USD terms. Performance to date is in line with modelling with gross portfolio returns between 15 and 20% in the different funds. The average IRR achieved on the first 14 exits is 25% proving wrong the belief that risk finance at this level is not commercially sustainable. A total of 21 investors have invested in GroFin funds and by the end of 2008 funds under management totalled $230 million making GroFin the biggest growth finance fund manager in Africa.  With the support of Shell Foundation and other development partners GroFin developed strong operational capability. The integrated product and service approach GroFin uses is very hands-on calling for local teams that that can work closely with the businesses to assess their needs  and deliver the necessary finance and business development assistance. The GroFin team now numbers 90 people operating  from ten offices in nine countries and has the capacity to do 140 transactions annually at a value of USD 50 million per annum. With annual fund management and services income approaching USD 10 million GroFin is the first profitable stand alone growth finance fund management company of size. The GroFin model delivers value at the market, SME client, investor, employee and shareholder level and it does this in a sector which few thought of as financially viable. It is this performance that makes us strong believers in the future of growth finance as an attractive asset class that can deliver sustainable financial, social and economic results in the ever important developing world SME sector.Over a period of 25 years I started-up, developed and sold a dozen small and medium enterprises in a variety of sectors. As with most entrepreneurs I on numerous occasions approached a bank for start-up and growth finance. Where I did not have the collateral to secure the needed loan I failed in raising the finance notwithstanding my growing track record and entrepreneurial success. In the late nineties I managed to raise start-up and growth finance on three occasions from American and European non-profit developing country business developers. The total amount raised was $500,000 and with this we build a multi-disciplinary energy company that we later sold to international utilities, Electricite de France and Nuon together with senior management.  As part of the energy company we started a division that financed other start-up energy companies in Africa on behalf of the same US non-profit specialist investment service that assisted our start-up. Their model for finance was based on viability and addressed the entrepreneurs needs. It however did not fully address the needs of investors as returns were low due to high costs and write-offs nor was it a sustainable commercial business model that could be scaled and replicated the world over to address the growing need for viability based risk finance in developing countries. It did however deliver excellent development returns. Numerous other small non-profit SME finance models similar to this existed at the time but none addressed the needs of the missing middle in a scale-able, nor financially sustainable way. They were all dependent on continued grant finance which inhibited the development of a growth finance asset class that is widely supported by the finance community.  Recognizing the need in the market I took the decision in 2004 to devote my time to the creation of a commercial for profit business that can address the needs of the ‘missing middle.  At a very early stage of GroFins life we teamed up with Shell Foundation who shared a similar vision to develop a commercial and scale-able solution that can be replicated through-out the developing world.  We firstly defined our SME target market. It was to be entrepreneurs that needed less than a $1 million in finance as above this level the maturity and sophistication of the enterprise appeals to private equity players and corporate financiers. We set the lower limit at $50,000 as below this level the informal nature of the businesses is better suited to microfinance. We developed a finance approach that accommodated the added complexities of working with the entrepreneurs that had limited track record and collateral and in the majority of the cases did not want an equity partner. These entrepreneurs need a viability based risk financier that understand and support their financial needs and assist them with business development assistance through all stages of their business development. Most importantly the finance decision is to be based on the ability of the entrepreneurial team and the viability of the business plan. Our goal was to ensure that nine out of ten businesses we finance become financially sustainable. To achieve this we use an integrated product and service approach that make both appropriate medium term (four to six year) risk finance available as well as ongoing pre- and post investment business development assistance to the investee company.  The GroFin finance instrument of choice is self liquidating. The required risk adjusted return is achieved by structuring a term loan with a market related interest rate in accordance with the cash flow characteristics of the business. In addition to the term loan an incentive is earned based on the turnover of the business to ensure that the transaction return is commensurate with the risk taken. This approach delivers equity type returns but without the usual exit problems that is associated with holding a share position in a small private company. Every GroFin SME client receives business development assistance to ensure a viable business plan is in hand before disbursement of finance followed by further business development after the flow of finance to ensure business profitability and thus repayment in accordance with the sought after transaction return. Through this integrated approach GroFin have to date done 146 transactions, 26% of them start-ups. The average transaction size is USD 358,000 and the average collateral cover is a low 40% with an average transaction term of 50 months. These financed businesses create significant value in the market place. Each transaction creates on average 15 new jobs and the GroFin portfolio companies now employ a total of 4112 personnel with a further 64,500 beneficiaries benefitting directly from the USD 52 million so invested. The cost per job created is a low USD 13,000 per position. The write off rate is less than 5% and more than 95% of the business is in operation which is significantly better than the market average and a true indication of the value of the structured finance and the ongoing business development assistance.  These businesses manufacture and deliver a wide range of goods and services and are all formal businesses that contribute significantly to the local economy. None of this is off course possible without the necessary investment capital and support of numerous investors. To develop an attractive asset class for investors the GroFin model had to deliver both measurable development returns as well as acceptable financial returns. Through two pilot funds established in 2004 GroFin demonstrated the return potential of investing risk finance in SMEs. GroFins target net returns to investors are 5 to 10% net after costs and write-offs to investors in USD terms. Performance to date is in line with modelling with gross portfolio returns between 15 and 20% in the different funds. The average IRR achieved on the first 14 exits is 25% proving wrong the belief that risk finance at this level is not commercially sustainable. A total of 21 investors have invested in GroFin funds and by the end of 2008 funds under management totalled $230 million making GroFin the biggest growth finance fund manager in Africa.  With the support of Shell Foundation and other development partners GroFin developed strong operational capability. The integrated product and service approach GroFin uses is very hands-on calling for local teams that that can work closely with the businesses to assess their needs  and deliver the necessary finance and business development assistance. The GroFin team now numbers 90 people operating  from ten offices in nine countries and has the capacity to do 140 transactions annually at a value of USD 50 million per annum. With annual fund management and services income approaching USD 10 million GroFin is the first profitable stand alone growth finance fund management company of size. The GroFin model delivers value at the market, SME client, investor, employee and shareholder level and it does this in a sector which few thought of as financially viable. It is this performance that makes us strong believers in the future of growth finance as an attractive asset class that can deliver sustainable financial, social and economic results in the ever important developing world SME sector.Over a period of 25 years I started-up, developed and sold a dozen small and medium enterprises in a variety of sectors. As with most entrepreneurs I on numerous occasions approached a bank for start-up and growth finance. Where I did not have the collateral to secure the needed loan I failed in raising the finance notwithstanding my growing track record and entrepreneurial success. In the late nineties I managed to raise start-up and growth finance on three occasions from American and European non-profit developing country business developers. The total amount raised was $500,000 and with this we build a multi-disciplinary energy company that we later sold to international utilities, Electricite de France and Nuon together with senior management.  As part of the energy company we started a division that financed other start-up energy companies in Africa on behalf of the same US non-profit specialist investment service that assisted our start-up. Their model for finance was based on viability and addressed the entrepreneurs needs. It however did not fully address the needs of investors as returns were low due to high costs and write-offs nor was it a sustainable commercial business model that could be scaled and replicated the world over to address the growing need for viability based risk finance in developing countries. It did however deliver excellent development returns. Numerous other small non-profit SME finance models similar to this existed at the time but none addressed the needs of the missing middle in a scale-able, nor financially sustainable way. They were all dependent on continued grant finance which inhibited the development of a growth finance asset class that is widely supported by the finance community.  Recognizing the need in the market I took the decision in 2004 to devote my time to the creation of a commercial for profit business that can address the needs of the ‘missing middle.  At a very early stage of GroFins life we teamed up with Shell Foundation who shared a similar vision to develop a commercial and scale-able solution that can be replicated through-out the developing world.  We firstly defined our SME target market. It was to be entrepreneurs that needed less than a $1 million in finance as above this level the maturity and sophistication of the enterprise appeals to private equity players and corporate financiers. We set the lower limit at $50,000 as below this level the informal nature of the businesses is better suited to microfinance. We developed a finance approach that accommodated the added complexities of working with the entrepreneurs that had limited track record and collateral and in the majority of the cases did not want an equity partner. These entrepreneurs need a viability based risk financier that understand and support their financial needs and assist them with business development assistance through all stages of their business development. Most importantly the finance decision is to be based on the ability of the entrepreneurial team and the viability of the business plan. Our goal was to ensure that nine out of ten businesses we finance become financially sustainable. To achieve this we use an integrated product and service approach that make both appropriate medium term (four to six year) risk finance available as well as ongoing pre- and post investment business development assistance to the investee company.  The GroFin finance instrument of choice is self liquidating. The required risk adjusted return is achieved by structuring a term loan with a market related interest rate in accordance with the cash flow characteristics of the business. In addition to the term loan an incentive is earned based on the turnover of the business to ensure that the transaction return is commensurate with the risk taken. This approach delivers equity type returns but without the usual exit problems that is associated with holding a share position in a small private company. Every GroFin SME client receives business development assistance to ensure a viable business plan is in hand before disbursement of finance followed by further business development after the flow of finance to ensure business profitability and thus repayment in accordance with the sought after transaction return. Through this integrated approach GroFin have to date done 146 transactions, 26% of them start-ups. The average transaction size is USD 358,000 and the average collateral cover is a low 40% with an average transaction term of 50 months. These financed businesses create significant value in the market place. Each transaction creates on average 15 new jobs and the GroFin portfolio companies now employ a total of 4112 personnel with a further 64,500 beneficiaries benefitting directly from the USD 52 million so invested. The cost per job created is a low USD 13,000 per position. The write off rate is less than 5% and more than 95% of the business is in operation which is significantly better than the market average and a true indication of the value of the structured finance and the ongoing business development assistance.  These businesses manufacture and deliver a wide range of goods and services and are all formal businesses that contribute significantly to the local economy. None of this is off course possible without the necessary investment capital and support of numerous investors. To develop an attractive asset class for investors the GroFin model had to deliver both measurable development returns as well as acceptable financial returns. Through two pilot funds established in 2004 GroFin demonstrated the return potential of investing risk finance in SMEs. GroFins target net returns to investors are 5 to 10% net after costs and write-offs to investors in USD terms. Performance to date is in line with modelling with gross portfolio returns between 15 and 20% in the different funds. The average IRR achieved on the first 14 exits is 25% proving wrong the belief that risk finance at this level is not commercially sustainable. A total of 21 investors have invested in GroFin funds and by the end of 2008 funds under management totalled $230 million making GroFin the biggest growth finance fund manager in Africa.  With the support of Shell Foundation and other development partners GroFin developed strong operational capability. The integrated product and service approach GroFin uses is very hands-on calling for local teams that that can work closely with the businesses to assess their needs  and deliver the necessary finance and business development assistance. The GroFin team now numbers 90 people operating  from ten offices in nine countries and has the capacity to do 140 transactions annually at a value of USD 50 million per annum. With annual fund management and services income approaching USD 10 million GroFin is the first profitable stand alone growth finance fund management company of size. The GroFin model delivers value at the market, SME client, investor, employee and shareholder level and it does this in a sector which few thought of as financially viable. It is this performance that makes us strong believers in the future of growth finance as an attractive asset class that can deliver sustainable financial, social and economic results in the ever important developing world SME sector.Over a period of 25 years I started-up, developed and sold a dozen small and medium enterprises in a variety of sectors. As with most entrepreneurs I on numerous occasions approached a bank for start-up and growth finance. Where I did not have the collateral to secure the needed loan I failed in raising the finance notwithstanding my growing track record and entrepreneurial success. In the late nineties I managed to raise start-up and growth finance on three occasions from American and European non-profit developing country business developers. The total amount raised was $500,000 and with this we build a multi-disciplinary energy company that we later sold to international utilities, Electricite de France and Nuon together with senior management.  As part of the energy company we started a division that financed other start-up energy companies in Africa on behalf of the same US non-profit specialist investment service that assisted our start-up. Their model for finance was based on viability and addressed the entrepreneurs needs. It however did not fully address the needs of investors as returns were low due to high costs and write-offs nor was it a sustainable commercial business model that could be scaled and replicated the world over to address the growing need for viability based risk finance in developing countries. It did however deliver excellent development returns. Numerous other small non-profit SME finance models similar to this existed at the time but none addressed the needs of the missing middle in a scale-able, nor financially sustainable way. They were all dependent on continued grant finance which inhibited the development of a growth finance asset class that is widely supported by the finance community.  Recognizing the need in the market I took the decision in 2004 to devote my time to the creation of a commercial for profit business that can address the needs of the ‘missing middle.  At a very early stage of GroFins life we teamed up with Shell Foundation who shared a similar vision to develop a commercial and scale-able solution that can be replicated through-out the developing world.  We firstly defined our SME target market. It was to be entrepreneurs that needed less than a $1 million in finance as above this level the maturity and sophistication of the enterprise appeals to private equity players and corporate financiers. We set the lower limit at $50,000 as below this level the informal nature of the businesses is better suited to microfinance. We developed a finance approach that accommodated the added complexities of working with the entrepreneurs that had limited track record and collateral and in the majority of the cases did not want an equity partner. These entrepreneurs need a viability based risk financier that understand and support their financial needs and assist them with business development assistance through all stages of their business development. Most importantly the finance decision is to be based on the ability of the entrepreneurial team and the viability of the business plan. Our goal was to ensure that nine out of ten businesses we finance become financially sustainable. To achieve this we use an integrated product and service approach that make both appropriate medium term (four to six year) risk finance available as well as ongoing pre- and post investment business development assistance to the investee company.  The GroFin finance instrument of choice is self liquidating. The required risk adjusted return is achieved by structuring a term loan with a market related interest rate in accordance with the cash flow characteristics of the business. In addition to the term loan an incentive is earned based on the turnover of the business to ensure that the transaction return is commensurate with the risk taken. This approach delivers equity type returns but without the usual exit problems that is associated with holding a share position in a small private company. Every GroFin SME client receives business development assistance to ensure a viable business plan is in hand before disbursement of finance followed by further business development after the flow of finance to ensure business profitability and thus repayment in accordance with the sought after transaction return. Through this integrated approach GroFin have to date done 146 transactions, 26% of them start-ups. The average transaction size is USD 358,000 and the average collateral cover is a low 40% with an average transaction term of 50 months. These financed businesses create significant value in the market place. Each transaction creates on average 15 new jobs and the GroFin portfolio companies now employ a total of 4112 personnel with a further 64,500 beneficiaries benefitting directly from the USD 52 million so invested. The cost per job created is a low USD 13,000 per position. The write off rate is less than 5% and more than 95% of the business is in operation which is significantly better than the market average and a true indication of the value of the structured finance and the ongoing business development assistance.  These businesses manufacture and deliver a wide range of goods and services and are all formal businesses that contribute significantly to the local economy. None of this is off course possible without the necessary investment capital and support of numerous investors. To develop an attractive asset class for investors the GroFin model had to deliver both measurable development returns as well as acceptable financial returns. Through two pilot funds established in 2004 GroFin demonstrated the return potential of investing risk finance in SMEs. GroFins target net returns to investors are 5 to 10% net after costs and write-offs to investors in USD terms. Performance to date is in line with modelling with gross portfolio returns between 15 and 20% in the different funds. The average IRR achieved on the first 14 exits is 25% proving wrong the belief that risk finance at this level is not commercially sustainable. A total of 21 investors have invested in GroFin funds and by the end of 2008 funds under management totalled $230 million making GroFin the biggest growth finance fund manager in Africa.  With the support of Shell Foundation and other development partners GroFin developed strong operational capability. The integrated product and service approach GroFin uses is very hands-on calling for local teams that that can work closely with the businesses to assess their needs  and deliver the necessary finance and business development assistance. The GroFin team now numbers 90 people operating  from ten offices in nine countries and has the capacity to do 140 transactions annually at a value of USD 50 million per annum. With annual fund management and services income approaching USD 10 million GroFin is the first profitable stand alone growth finance fund management company of size. The GroFin model delivers value at the market, SME client, investor, employee and shareholder level and it does this in a sector which few thought of as financially viable. It is this performance that makes us strong believers in the future of growth finance as an attractive asset class that can deliver sustainable financial, social and economic results in the ever important developing world SME sector.Over a period of 25 years I started-up, developed and sold a dozen small and medium enterprises in a variety of sectors. As with most entrepreneurs I on numerous occasions approached a bank for start-up and growth finance. Where I did not have the collateral to secure the needed loan I failed in raising the finance notwithstanding my growing track record and entrepreneurial success. In the late nineties I managed to raise start-up and growth finance on three occasions from American and European non-profit developing country business developers. The total amount raised was $500,000 and with this we build a multi-disciplinary energy company that we later sold to international utilities, Electricite de France and Nuon together with senior management.  As part of the energy company we started a division that financed other start-up energy companies in Africa on behalf of the same US non-profit specialist investment service that assisted our start-up. Their model for finance was based on viability and addressed the entrepreneurs needs. It however did not fully address the needs of investors as returns were low due to high costs and write-offs nor was it a sustainable commercial business model that could be scaled and replicated the world over to address the growing need for viability based risk finance in developing countries. It did however deliver excellent development returns. Numerous other small non-profit SME finance models similar to this existed at the time but none addressed the needs of the missing middle in a scale-able, nor financially sustainable way. They were all dependent on continued grant finance which inhibited the development of a growth finance asset class that is widely supported by the finance community.  Recognizing the need in the market I took the decision in 2004 to devote my time to the creation of a commercial for profit business that can address the needs of the ‘missing middle.  At a very early stage of GroFins life we teamed up with Shell Foundation who shared a similar vision to develop a commercial and scale-able solution that can be replicated through-out the developing world.  We firstly defined our SME target market. It was to be entrepreneurs that needed less than a $1 million in finance as above this level the maturity and sophistication of the enterprise appeals to private equity players and corporate financiers. We set the lower limit at $50,000 as below this level the informal nature of the businesses is better suited to microfinance. We developed a finance approach that accommodated the added complexities of working with the entrepreneurs that had limited track record and collateral and in the majority of the cases did not want an equity partner. These entrepreneurs need a viability based risk financier that understand and support their financial needs and assist them with business development assistance through all stages of their business development. Most importantly the finance decision is to be based on the ability of the entrepreneurial team and the viability of the business plan. Our goal was to ensure that nine out of ten businesses we finance become financially sustainable. To achieve this we use an integrated product and service approach that make both appropriate medium term (four to six year) risk finance available as well as ongoing pre- and post investment business development assistance to the investee company.  The GroFin finance instrument of choice is self liquidating. The required risk adjusted return is achieved by structuring a term loan with a market related interest rate in accordance with the cash flow characteristics of the business. In addition to the term loan an incentive is earned based on the turnover of the business to ensure that the transaction return is commensurate with the risk taken. This approach delivers equity type returns but without the usual exit problems that is associated with holding a share position in a small private company. Every GroFin SME client receives business development assistance to ensure a viable business plan is in hand before disbursement of finance followed by further business development after the flow of finance to ensure business profitability and thus repayment in accordance with the sought after transaction return. Through this integrated approach GroFin have to date done 146 transactions, 26% of them start-ups. The average transaction size is USD 358,000 and the average collateral cover is a low 40% with an average transaction term of 50 months. These financed businesses create significant value in the market place. Each transaction creates on average 15 new jobs and the GroFin portfolio companies now employ a total of 4112 personnel with a further 64,500 beneficiaries benefitting directly from the USD 52 million so invested. The cost per job created is a low USD 13,000 per position. The write off rate is less than 5% and more than 95% of the business is in operation which is significantly better than the market average and a true indication of the value of the structured finance and the ongoing business development assistance.  These businesses manufacture and deliver a wide range of goods and services and are all formal businesses that contribute significantly to the local economy. None of this is off course possible without the necessary investment capital and support of numerous investors. To develop an attractive asset class for investors the GroFin model had to deliver both measurable development returns as well as acceptable financial returns. Through two pilot funds established in 2004 GroFin demonstrated the return potential of investing risk finance in SMEs. GroFins target net returns to investors are 5 to 10% net after costs and write-offs to investors in USD terms. Performance to date is in line with modelling with gross portfolio returns between 15 and 20% in the different funds. The average IRR achieved on the first 14 exits is 25% proving wrong the belief that risk finance at this level is not commercially sustainable. A total of 21 investors have invested in GroFin funds and by the end of 2008 funds under management totalled $230 million making GroFin the biggest growth finance fund manager in Africa.  With the support of Shell Foundation and other development partners GroFin developed strong operational capability. The integrated product and service approach GroFin uses is very hands-on calling for local teams that that can work closely with the businesses to assess their needs  and deliver the necessary finance and business development assistance. The GroFin team now numbers 90 people operating  from ten offices in nine countries and has the capacity to do 140 transactions annually at a value of USD 50 million per annum. With annual fund management and services income approaching USD 10 million GroFin is the first profitable stand alone growth finance fund management company of size. The GroFin model delivers value at the market, SME client, investor, employee and shareholder level and it does this in a sector which few thought of as financially viable. It is this performance that makes us strong believers in the future of growth finance as an attractive asset class that can deliver sustainable financial, social and economic results in the ever important developing world SME sector.Over a period of 25 years I started-up, developed and sold a dozen small and medium enterprises in a variety of sectors. As with most entrepreneurs I on numerous occasions approached a bank for start-up and growth finance. Where I did not have the collateral to secure the needed loan I failed in raising the finance notwithstanding my growing track record and entrepreneurial success. In the late nineties I managed to raise start-up and growth finance on three occasions from American and European non-profit developing country business developers. The total amount raised was $500,000 and with this we build a multi-disciplinary energy company that we later sold to international utilities, Electricite de France and Nuon together with senior management.  As part of the energy company we started a division that financed other start-up energy companies in Africa on behalf of the same US non-profit specialist investment service that assisted our start-up. Their model for finance was based on viability and addressed the entrepreneurs needs. It however did not fully address the needs of investors as returns were low due to high costs and write-offs nor was it a sustainable commercial business model that could be scaled and replicated the world over to address the growing need for viability based risk finance in developing countries. It did however deliver excellent development returns. Numerous other small non-profit SME finance models similar to this existed at the time but none addressed the needs of the missing middle in a scale-able, nor financially sustainable way. They were all dependent on continued grant finance which inhibited the development of a growth finance asset class that is widely supported by the finance community.  Recognizing the need in the market I took the decision in 2004 to devote my time to the creation of a commercial for profit business that can address the needs of the ‘missing middle.  At a very early stage of GroFins life we teamed up with Shell Foundation who shared a similar vision to develop a commercial and scale-able solution that can be replicated through-out the developing world.  We firstly defined our SME target market. It was to be entrepreneurs that needed less than a $1 million in finance as above this level the maturity and sophistication of the enterprise appeals to private equity players and corporate financiers. We set the lower limit at $50,000 as below this level the informal nature of the businesses is better suited to microfinance. We developed a finance approach that accommodated the added complexities of working with the entrepreneurs that had limited track record and collateral and in the majority of the cases did not want an equity partner. These entrepreneurs need a viability based risk financier that understand and support their financial needs and assist them with business development assistance through all stages of their business development. Most importantly the finance decision is to be based on the ability of the entrepreneurial team and the viability of the business plan. Our goal was to ensure that nine out of ten businesses we finance become financially sustainable. To achieve this we use an integrated product and service approach that make both appropriate medium term (four to six year) risk finance available as well as ongoing pre- and post investment business development assistance to the investee company.  The GroFin finance instrument of choice is self liquidating. The required risk adjusted return is achieved by structuring a term loan with a market related interest rate in accordance with the cash flow characteristics of the business. In addition to the term loan an incentive is earned based on the turnover of the business to ensure that the transaction return is commensurate with the risk taken. This approach delivers equity type returns but without the usual exit problems that is associated with holding a share position in a small private company. Every GroFin SME client receives business development assistance to ensure a viable business plan is in hand before disbursement of finance followed by further business development after the flow of finance to ensure business profitability and thus repayment in accordance with the sought after transaction return. Through this integrated approach GroFin have to date done 146 transactions, 26% of them start-ups. The average transaction size is USD 358,000 and the average collateral cover is a low 40% with an average transaction term of 50 months. These financed businesses create significant value in the market place. Each transaction creates on average 15 new jobs and the GroFin portfolio companies now employ a total of 4112 personnel with a further 64,500 beneficiaries benefitting directly from the USD 52 million so invested. The cost per job created is a low USD 13,000 per position. The write off rate is less than 5% and more than 95% of the business is in operation which is significantly better than the market average and a true indication of the value of the structured finance and the ongoing business development assistance.  These businesses manufacture and deliver a wide range of goods and services and are all formal businesses that contribute significantly to the local economy. None of this is off course possible without the necessary investment capital and support of numerous investors. To develop an attractive asset class for investors the GroFin model had to deliver both measurable development returns as well as acceptable financial returns. Through two pilot funds established in 2004 GroFin demonstrated the return potential of investing risk finance in SMEs. GroFins target net returns to investors are 5 to 10% net after costs and write-offs to investors in USD terms. Performance to date is in line with modelling with gross portfolio returns between 15 and 20% in the different funds. The average IRR achieved on the first 14 exits is 25% proving wrong the belief that risk finance at this level is not commercially sustainable. A total of 21 investors have invested in GroFin funds and by the end of 2008 funds under management totalled $230 million making GroFin the biggest growth finance fund manager in Africa.  With the support of Shell Foundation and other development partners GroFin developed strong operational capability. The integrated product and service approach GroFin uses is very hands-on calling for local teams that that can work closely with the businesses to assess their needs  and deliver the necessary finance and business development assistance. The GroFin team now numbers 90 people operating  from ten offices in nine countries and has the capacity to do 140 transactions annually at a value of USD 50 million per annum. With annual fund management and services income approaching USD 10 million GroFin is the first profitable stand alone growth finance fund management company of size. The GroFin model delivers value at the market, SME client, investor, employee and shareholder level and it does this in a sector which few thought of as financially viable. It is this performance that makes us strong believers in the future of growth finance as an attractive asset class that can deliver sustainable financial, social and economic results in the ever important developing world SME sector.Over a period of 25 years I started-up, developed and sold a dozen small and medium enterprises in a variety of sectors. As with most entrepreneurs I on numerous occasions approached a bank for start-up and growth finance. Where I did not have the collateral to secure the needed loan I failed in raising the finance notwithstanding my growing track record and entrepreneurial success. In the late nineties I managed to raise start-up and growth finance on three occasions from American and European non-profit developing country business developers. The total amount raised was $500,000 and with this we build a multi-disciplinary energy company that we later sold to international utilities, Electricite de France and Nuon together with senior management.  As part of the energy company we started a division that financed other start-up energy companies in Africa on behalf of the same US non-profit specialist investment service that assisted our start-up. Their model for finance was based on viability and addressed the entrepreneurs needs. It however did not fully address the needs of investors as returns were low due to high costs and write-offs nor was it a sustainable commercial business model that could be scaled and replicated the world over to address the growing need for viability based risk finance in developing countries. It did however deliver excellent development returns. Numerous other small non-profit SME finance models similar to this existed at the time but none addressed the needs of the missing middle in a scale-able, nor financially sustainable way. They were all dependent on continued grant finance which inhibited the development of a growth finance asset class that is widely supported by the finance community.  Recognizing the need in the market I took the decision in 2004 to devote my time to the creation of a commercial for profit business that can address the needs of the ‘missing middle.  At a very early stage of GroFins life we teamed up with Shell Foundation who shared a similar vision to develop a commercial and scale-able solution that can be replicated through-out the developing world.  We firstly defined our SME target market. It was to be entrepreneurs that needed less than a $1 million in finance as above this level the maturity and sophistication of the enterprise appeals to private equity players and corporate financiers. We set the lower limit at $50,000 as below this level the informal nature of the businesses is better suited to microfinance. We developed a finance approach that accommodated the added complexities of working with the entrepreneurs that had limited track record and collateral and in the majority of the cases did not want an equity partner. These entrepreneurs need a viability based risk financier that understand and support their financial needs and assist them with business development assistance through all stages of their business development. Most importantly the finance decision is to be based on the ability of the entrepreneurial team and the viability of the business plan. Our goal was to ensure that nine out of ten businesses we finance become financially sustainable. To achieve this we use an integrated product and service approach that make both appropriate medium term (four to six year) risk finance available as well as ongoing pre- and post investment business development assistance to the investee company.  The GroFin finance instrument of choice is self liquidating. The required risk adjusted return is achieved by structuring a term loan with a market related interest rate in accordance with the cash flow characteristics of the business. In addition to the term loan an incentive is earned based on the turnover of the business to ensure that the transaction return is commensurate with the risk taken. This approach delivers equity type returns but without the usual exit problems that is associated with holding a share position in a small private company. Every GroFin SME client receives business development assistance to ensure a viable business plan is in hand before disbursement of finance followed by further business development after the flow of finance to ensure business profitability and thus repayment in accordance with the sought after transaction return. Through this integrated approach GroFin have to date done 146 transactions, 26% of them start-ups. The average transaction size is USD 358,000 and the average collateral cover is a low 40% with an average transaction term of 50 months. These financed businesses create significant value in the market place. Each transaction creates on average 15 new jobs and the GroFin portfolio companies now employ a total of 4112 personnel with a further 64,500 beneficiaries benefitting directly from the USD 52 million so invested. The cost per job created is a low USD 13,000 per position. The write off rate is less than 5% and more than 95% of the business is in operation which is significantly better than the market average and a true indication of the value of the structured finance and the ongoing business development assistance.  These businesses manufacture and deliver a wide range of goods and services and are all formal businesses that contribute significantly to the local economy. None of this is off course possible without the necessary investment capital and support of numerous investors. To develop an attractive asset class for investors the GroFin model had to deliver both measurable development returns as well as acceptable financial returns. Through two pilot funds established in 2004 GroFin demonstrated the return potential of investing risk finance in SMEs. GroFins target net returns to investors are 5 to 10% net after costs and write-offs to investors in USD terms. Performance to date is in line with modelling with gross portfolio returns between 15 and 20% in the different funds. The average IRR achieved on the first 14 exits is 25% proving wrong the belief that risk finance at this level is not commercially sustainable. A total of 21 investors have invested in GroFin funds and by the end of 2008 funds under management totalled $230 million making GroFin the biggest growth finance fund manager in Africa.  With the support of Shell Foundation and other development partners GroFin developed strong operational capability. The integrated product and service approach GroFin uses is very hands-on calling for local teams that that can work closely with the businesses to assess their needs  and deliver the necessary finance and business development assistance. The GroFin team now numbers 90 people operating  from ten offices in nine countries and has the capacity to do 140 transactions annually at a value of USD 50 million per annum. With annual fund management and services income approaching USD 10 million GroFin is the first profitable stand alone growth finance fund management company of size. The GroFin model delivers value at the market, SME client, investor, employee and shareholder level and it does this in a sector which few thought of as financially viable. It is this performance that makes us strong believers in the future of growth finance as an attractive asset class that can deliver sustainable financial, social and economic results in the ever important developing world SME sector.Over a period of 25 years I started-up, developed and sold a dozen small and medium enterprises in a variety of sectors. As with most entrepreneurs I on numerous occasions approached a bank for start-up and growth finance. Where I did not have the collateral to secure the needed loan I failed in raising the finance notwithstanding my growing track record and entrepreneurial success. In the late nineties I managed to raise start-up and growth finance on three occasions from American and European non-profit developing country business developers. The total amount raised was $500,000 and with this we build a multi-disciplinary energy company that we later sold to international utilities, Electricite de France and Nuon together with senior management.  As part of the energy company we started a division that financed other start-up energy companies in Africa on behalf of the same US non-profit specialist investment service that assisted our start-up. Their model for finance was based on viability and addressed the entrepreneurs needs. It however did not fully address the needs of investors as returns were low due to high costs and write-offs nor was it a sustainable commercial business model that could be scaled and replicated the world over to address the growing need for viability based risk finance in developing countries. It did however deliver excellent development returns. Numerous other small non-profit SME finance models similar to this existed at the time but none addressed the needs of the missing middle in a scale-able, nor financially sustainable way. They were all dependent on continued grant finance which inhibited the development of a growth finance asset class that is widely supported by the finance community.  Recognizing the need in the market I took the decision in 2004 to devote my time to the creation of a commercial for profit business that can address the needs of the ‘missing middle.  At a very early stage of GroFins life we teamed up with Shell Foundation who shared a similar vision to develop a commercial and scale-able solution that can be replicated through-out the developing world.  We firstly defined our SME target market. It was to be entrepreneurs that needed less than a $1 million in finance as above this level the maturity and sophistication of the enterprise appeals to private equity players and corporate financiers. We set the lower limit at $50,000 as below this level the informal nature of the businesses is better suited to microfinance. We developed a finance approach that accommodated the added complexities of working with the entrepreneurs that had limited track record and collateral and in the majority of the cases did not want an equity partner. These entrepreneurs need a viability based risk financier that understand and support their financial needs and assist them with business development assistance through all stages of their business development. Most importantly the finance decision is to be based on the ability of the entrepreneurial team and the viability of the business plan. Our goal was to ensure that nine out of ten businesses we finance become financially sustainable. To achieve this we use an integrated product and service approach that make both appropriate medium term (four to six year) risk finance available as well as ongoing pre- and post investment business development assistance to the investee company.  The GroFin finance instrument of choice is self liquidating. The required risk adjusted return is achieved by structuring a term loan with a market related interest rate in accordance with the cash flow characteristics of the business. In addition to the term loan an incentive is earned based on the turnover of the business to ensure that the transaction return is commensurate with the risk taken. This approach delivers equity type returns but without the usual exit problems that is associated with holding a share position in a small private company. Every GroFin SME client receives business development assistance to ensure a viable business plan is in hand before disbursement of finance followed by further business development after the flow of finance to ensure business profitability and thus repayment in accordance with the sought after transaction return. Through this integrated approach GroFin have to date done 146 transactions, 26% of them start-ups. The average transaction size is USD 358,000 and the average collateral cover is a low 40% with an average transaction term of 50 months. These financed businesses create significant value in the market place. Each transaction creates on average 15 new jobs and the GroFin portfolio companies now employ a total of 4112 personnel with a further 64,500 beneficiaries benefitting directly from the USD 52 million so invested. The cost per job created is a low USD 13,000 per position. The write off rate is less than 5% and more than 95% of the business is in operation which is significantly better than the market average and a true indication of the value of the structured finance and the ongoing business development assistance.  These businesses manufacture and deliver a wide range of goods and services and are all formal businesses that contribute significantly to the local economy. None of this is off course possible without the necessary investment capital and support of numerous investors. To develop an attractive asset class for investors the GroFin model had to deliver both measurable development returns as well as acceptable financial returns. Through two pilot funds established in 2004 GroFin demonstrated the return potential of investing risk finance in SMEs. GroFins target net returns to investors are 5 to 10% net after costs and write-offs to investors in USD terms. Performance to date is in line with modelling with gross portfolio returns between 15 and 20% in the different funds. The average IRR achieved on the first 14 exits is 25% proving wrong the belief that risk finance at this level is not commercially sustainable. A total of 21 investors have invested in GroFin funds and by the end of 2008 funds under management totalled $230 million making GroFin the biggest growth finance fund manager in Africa.  With the support of Shell Foundation and other development partners GroFin developed strong operational capability. The integrated product and service approach GroFin uses is very hands-on calling for local teams that that can work closely with the businesses to assess their needs  and deliver the necessary finance and business development assistance. The GroFin team now numbers 90 people operating  from ten offices in nine countries and has the capacity to do 140 transactions annually at a value of USD 50 million per annum. With annual fund management and services income approaching USD 10 million GroFin is the first profitable stand alone growth finance fund management company of size. The GroFin model delivers value at the market, SME client, investor, employee and shareholder level and it does this in a sector which few thought of as financially viable. It is this performance that makes us strong believers in the future of growth finance as an attractive asset class that can deliver sustainable financial, social and economic results in the ever important developing world SME sector.Over a period of 25 years I started-up, developed and sold a dozen small and medium enterprises in a variety of sectors. As with most entrepreneurs I on numerous occasions approached a bank for start-up and growth finance. Where I did not have the collateral to secure the needed loan I failed in raising the finance notwithstanding my growing track record and entrepreneurial success. In the late nineties I managed to raise start-up and growth finance on three occasions from American and European non-profit developing country business developers. The total amount raised was $500,000 and with this we build a multi-disciplinary energy company that we later sold to international utilities, Electricite de France and Nuon together with senior management.  As part of the energy company we started a division that financed other start-up energy companies in Africa on behalf of the same US non-profit specialist investment service that assisted our start-up. Their model for finance was based on viability and addressed the entrepreneurs needs. It however did not fully address the needs of investors as returns were low due to high costs and write-offs nor was it a sustainable commercial business model that could be scaled and replicated the world over to address the growing need for viability based risk finance in developing countries. It did however deliver excellent development returns. Numerous other small non-profit SME finance models similar to this existed at the time but none addressed the needs of the missing middle in a scale-able, nor financially sustainable way. They were all dependent on continued grant finance which inhibited the development of a growth finance asset class that is widely supported by the finance community.  Recognizing the need in the market I took the decision in 2004 to devote my time to the creation of a commercial for profit business that can address the needs of the ‘missing middle.  At a very early stage of GroFins life we teamed up with Shell Foundation who shared a similar vision to develop a commercial and scale-able solution that can be replicated through-out the developing world.  We firstly defined our SME target market. It was to be entrepreneurs that needed less than a $1 million in finance as above this level the maturity and sophistication of the enterprise appeals to private equity players and corporate financiers. We set the lower limit at $50,000 as below this level the informal nature of the businesses is better suited to microfinance. We developed a finance approach that accommodated the added complexities of working with the entrepreneurs that had limited track record and collateral and in the majority of the cases did not want an equity partner. These entrepreneurs need a viability based risk financier that understand and support their financial needs and assist them with business development assistance through all stages of their business development. Most importantly the finance decision is to be based on the ability of the entrepreneurial team and the viability of the business plan. Our goal was to ensure that nine out of ten businesses we finance become financially sustainable. To achieve this we use an integrated product and service approach that make both appropriate medium term (four to six year) risk finance available as well as ongoing pre- and post investment business development assistance to the investee company.  The GroFin finance instrument of choice is self liquidating. The required risk adjusted return is achieved by structuring a term loan with a market related interest rate in accordance with the cash flow characteristics of the business. In addition to the term loan an incentive is earned based on the turnover of the business to ensure that the transaction return is commensurate with the risk taken. This approach delivers equity type returns but without the usual exit problems that is associated with holding a share position in a small private company. Every GroFin SME client receives business development assistance to ensure a viable business plan is in hand before disbursement of finance followed by further business development after the flow of finance to ensure business profitability and thus repayment in accordance with the sought after transaction return. Through this integrated approach GroFin have to date done 146 transactions, 26% of them start-ups. The average transaction size is USD 358,000 and the average collateral cover is a low 40% with an average transaction term of 50 months. These financed businesses create significant value in the market place. Each transaction creates on average 15 new jobs and the GroFin portfolio companies now employ a total of 4112 personnel with a further 64,500 beneficiaries benefitting directly from the USD 52 million so invested. The cost per job created is a low USD 13,000 per position. The write off rate is less than 5% and more than 95% of the business is in operation which is significantly better than the market average and a true indication of the value of the structured finance and the ongoing business development assistance.  These businesses manufacture and deliver a wide range of goods and services and are all formal businesses that contribute significantly to the local economy. None of this is off course possible without the necessary investment capital and support of numerous investors. To develop an attractive asset class for investors the GroFin model had to deliver both measurable development returns as well as acceptable financial returns. Through two pilot funds established in 2004 GroFin demonstrated the return potential of investing risk finance in SMEs. GroFins target net returns to investors are 5 to 10% net after costs and write-offs to investors in USD terms. Performance to date is in line with modelling with gross portfolio returns between 15 and 20% in the different funds. The average IRR achieved on the first 14 exits is 25% proving wrong the belief that risk finance at this level is not commercially sustainable. A total of 21 investors have invested in GroFin funds and by the end of 2008 funds under management totalled $230 million making GroFin the biggest growth finance fund manager in Africa.  With the support of Shell Foundation and other development partners GroFin developed strong operational capability. The integrated product and service approach GroFin uses is very hands-on calling for local teams that that can work closely with the businesses to assess their needs  and deliver the necessary finance and business development assistance. The GroFin team now numbers 90 people operating  from ten offices in nine countries and has the capacity to do 140 transactions annually at a value of USD 50 million per annum. With annual fund management and services income approaching USD 10 million GroFin is the first profitable stand alone growth finance fund management company of size. The GroFin model delivers value at the market, SME client, investor, employee and shareholder level and it does this in a sector which few thought of as financially viable. It is this performance that makes us strong believers in the future of growth finance as an attractive asset class that can deliver sustainable financial, social and economic results in the ever important developing world SME sector.Over a period of 25 years I started-up, developed and sold a dozen small and medium enterprises in a variety of sectors. As with most entrepreneurs I on numerous occasions approached a bank for start-up and growth finance. Where I did not have the collateral to secure the needed loan I failed in raising the finance notwithstanding my growing track record and entrepreneurial success. In the late nineties I managed to raise start-up and growth finance on three occasions from American and European non-profit developing country business developers. The total amount raised was $500,000 and with this we build a multi-disciplinary energy company that we later sold to international utilities, Electricite de France and Nuon together with senior management.  As part of the energy company we started a division that financed other start-up energy companies in Africa on behalf of the same US non-profit specialist investment service that assisted our start-up. Their model for finance was based on viability and addressed the entrepreneurs needs. It however did not fully address the needs of investors as returns were low due to high costs and write-offs nor was it a sustainable commercial business model that could be scaled and replicated the world over to address the growing need for viability based risk finance in developing countries. It did however deliver excellent development returns. Numerous other small non-profit SME finance models similar to this existed at the time but none addressed the needs of the missing middle in a scale-able, nor financially sustainable way. They were all dependent on continued grant finance which inhibited the development of a growth finance asset class that is widely supported by the finance community.  Recognizing the need in the market I took the decision in 2004 to devote my time to the creation of a commercial for profit business that can address the needs of the ‘missing middle.  At a very early stage of GroFins life we teamed up with Shell Foundation who shared a similar vision to develop a commercial and scale-able solution that can be replicated through-out the developing world.  We firstly defined our SME target market. It was to be entrepreneurs that needed less than a $1 million in finance as above this level the maturity and sophistication of the enterprise appeals to private equity players and corporate financiers. We set the lower limit at $50,000 as below this level the informal nature of the businesses is better suited to microfinance. We developed a finance approach that accommodated the added complexities of working with the entrepreneurs that had limited track record and collateral and in the majority of the cases did not want an equity partner. These entrepreneurs need a viability based risk financier that understand and support their financial needs and assist them with business development assistance through all stages of their business development. Most importantly the finance decision is to be based on the ability of the entrepreneurial team and the viability of the business plan. Our goal was to ensure that nine out of ten businesses we finance become financially sustainable. To achieve this we use an integrated product and service approach that make both appropriate medium term (four to six year) risk finance available as well as ongoing pre- and post investment business development assistance to the investee company.  The GroFin finance instrument of choice is self liquidating. The required risk adjusted return is achieved by structuring a term loan with a market related interest rate in accordance with the cash flow characteristics of the business. In addition to the term loan an incentive is earned based on the turnover of the business to ensure that the transaction return is commensurate with the risk taken. This approach delivers equity type returns but without the usual exit problems that is associated with holding a share position in a small private company. Every GroFin SME client receives business development assistance to ensure a viable business plan is in hand before disbursement of finance followed by further business development after the flow of finance to ensure business profitability and thus repayment in accordance with the sought after transaction return. Through this integrated approach GroFin have to date done 146 transactions, 26% of them start-ups. The average transaction size is USD 358,000 and the average collateral cover is a low 40% with an average transaction term of 50 months. These financed businesses create significant value in the market place. Each transaction creates on average 15 new jobs and the GroFin portfolio companies now employ a total of 4112 personnel with a further 64,500 beneficiaries benefitting directly from the USD 52 million so invested. The cost per job created is a low USD 13,000 per position. The write off rate is less than 5% and more than 95% of the business is in operation which is significantly better than the market average and a true indication of the value of the structured finance and the ongoing business development assistance.  These businesses manufacture and deliver a wide range of goods and services and are all formal businesses that contribute significantly to the local economy. None of this is off course possible without the necessary investment capital and support of numerous investors. To develop an attractive asset class for investors the GroFin model had to deliver both measurable development returns as well as acceptable financial returns. Through two pilot funds established in 2004 GroFin demonstrated the return potential of investing risk finance in SMEs. GroFins target net returns to investors are 5 to 10% net after costs and write-offs to investors in USD terms. Performance to date is in line with modelling with gross portfolio returns between 15 and 20% in the different funds. The average IRR achieved on the first 14 exits is 25% proving wrong the belief that risk finance at this level is not commercially sustainable. A total of 21 investors have invested in GroFin funds and by the end of 2008 funds under management totalled $230 million making GroFin the biggest growth finance fund manager in Africa.  With the support of Shell Foundation and other development partners GroFin developed strong operational capability. The integrated product and service approach GroFin uses is very hands-on calling for local teams that that can work closely with the businesses to assess their needs  and deliver the necessary finance and business development assistance. The GroFin team now numbers 90 people operating  from ten offices in nine countries and has the capacity to do 140 transactions annually at a value of USD 50 million per annum. With annual fund management and services income approaching USD 10 million GroFin is the first profitable stand alone growth finance fund management company of size. The GroFin model delivers value at the market, SME client, investor, employee and shareholder level and it does this in a sector which few thought of as financially viable. It is this performance that makes us strong believers in the future of growth finance as an attractive asset class that can deliver sustainable financial, social and economic results in the ever important developing world SME sector.Over a period of 25 years I started-up, developed and sold a dozen small and medium enterprises in a variety of sectors. As with most entrepreneurs I on numerous occasions approached a bank for start-up and growth finance. Where I did not have the collateral to secure the needed loan I failed in raising the finance notwithstanding my growing track record and entrepreneurial success. In the late nineties I managed to raise start-up and growth finance on three occasions from American and European non-profit developing country business developers. The total amount raised was $500,000 and with this we build a multi-disciplinary energy company that we later sold to international utilities, Electricite de France and Nuon together with senior management.  As part of the energy company we started a division that financed other start-up energy companies in Africa on behalf of the same US non-profit specialist investment service that assisted our start-up. Their model for finance was based on viability and addressed the entrepreneurs needs. It however did not fully address the needs of investors as returns were low due to high costs and write-offs nor was it a sustainable commercial business model that could be scaled and replicated the world over to address the growing need for viability based risk finance in developing countries. It did however deliver excellent development returns. Numerous other small non-profit SME finance models similar to this existed at the time but none addressed the needs of the missing middle in a scale-able, nor financially sustainable way. They were all dependent on continued grant finance which inhibited the development of a growth finance asset class that is widely supported by the finance community.  Recognizing the need in the market I took the decision in 2004 to devote my time to the creation of a commercial for profit business that can address the needs of the ‘missing middle.  At a very early stage of GroFins life we teamed up with Shell Foundation who shared a similar vision to develop a commercial and scale-able solution that can be replicated through-out the developing world.  We firstly defined our SME target market. It was to be entrepreneurs that needed less than a $1 million in finance as above this level the maturity and sophistication of the enterprise appeals to private equity players and corporate financiers. We set the lower limit at $50,000 as below this level the informal nature of the businesses is better suited to microfinance. We developed a finance approach that accommodated the added complexities of working with the entrepreneurs that had limited track record and collateral and in the majority of the cases did not want an equity partner. These entrepreneurs need a viability based risk financier that understand and support their financial needs and assist them with business development assistance through all stages of their business development. Most importantly the finance decision is to be based on the ability of the entrepreneurial team and the viability of the business plan. Our goal was to ensure that nine out of ten businesses we finance become financially sustainable. To achieve this we use an integrated product and service approach that make both appropriate medium term (four to six year) risk finance available as well as ongoing pre- and post investment business development assistance to the investee company.  The GroFin finance instrument of choice is self liquidating. The required risk adjusted return is achieved by structuring a term loan with a market related interest rate in accordance with the cash flow characteristics of the business. In addition to the term loan an incentive is earned based on the turnover of the business to ensure that the transaction return is commensurate with the risk taken. This approach delivers equity type returns but without the usual exit problems that is associated with holding a share position in a small private company. Every GroFin SME client receives business development assistance to ensure a viable business plan is in hand before disbursement of finance followed by further business development after the flow of finance to ensure business profitability and thus repayment in accordance with the sought after transaction return. Through this integrated approach GroFin have to date done 146 transactions, 26% of them start-ups. The average transaction size is USD 358,000 and the average collateral cover is a low 40% with an average transaction term of 50 months. These financed businesses create significant value in the market place. Each transaction creates on average 15 new jobs and the GroFin portfolio companies now employ a total of 4112 personnel with a further 64,500 beneficiaries benefitting directly from the USD 52 million so invested. The cost per job created is a low USD 13,000 per position. The write off rate is less than 5% and more than 95% of the business is in operation which is significantly better than the market average and a true indication of the value of the structured finance and the ongoing business development assistance.  These businesses manufacture and deliver a wide range of goods and services and are all formal businesses that contribute significantly to the local economy. None of this is off course possible without the necessary investment capital and support of numerous investors. To develop an attractive asset class for investors the GroFin model had to deliver both measurable development returns as well as acceptable financial returns. Through two pilot funds established in 2004 GroFin demonstrated the return potential of investing risk finance in SMEs. GroFins target net returns to investors are 5 to 10% net after costs and write-offs to investors in USD terms. Performance to date is in line with modelling with gross portfolio returns between 15 and 20% in the different funds. The average IRR achieved on the first 14 exits is 25% proving wrong the belief that risk finance at this level is not commercially sustainable. A total of 21 investors have invested in GroFin funds and by the end of 2008 funds under management totalled $230 million making GroFin the biggest growth finance fund manager in Africa.  With the support of Shell Foundation and other development partners GroFin developed strong operational capability. The integrated product and service approach GroFin uses is very hands-on calling for local teams that that can work closely with the businesses to assess their needs  and deliver the necessary finance and business development assistance. The GroFin team now numbers 90 people operating  from ten offices in nine countries and has the capacity to do 140 transactions annually at a value of USD 50 million per annum. With annual fund management and services income approaching USD 10 million GroFin is the first profitable stand alone growth finance fund management company of size. The GroFin model delivers value at the market, SME client, investor, employee and shareholder level and it does this in a sector which few thought of as financially viable. It is this performance that makes us strong believers in the future of growth finance as an attractive asset class that can deliver sustainable financial, social and economic results in the ever important developing world SME sector.Over a period of 25 years I started-up, developed and sold a dozen small and medium enterprises in a variety of sectors. As with most entrepreneurs I on numerous occasions approached a bank for start-up and growth finance. Where I did not have the collateral to secure the needed loan I failed in raising the finance notwithstanding my growing track record and entrepreneurial success. In the late nineties I managed to raise start-up and growth finance on three occasions from American and European non-profit developing country business developers. The total amount raised was $500,000 and with this we build a multi-disciplinary energy company that we later sold to international utilities, Electricite de France and Nuon together with senior management.  As part of the energy company we started a division that financed other start-up energy companies in Africa on behalf of the same US non-profit specialist investment service that assisted our start-up. Their model for finance was based on viability and addressed the entrepreneurs needs. It however did not fully address the needs of investors as returns were low due to high costs and write-offs nor was it a sustainable commercial business model that could be scaled and replicated the world over to address the growing need for viability based risk finance in developing countries. It did however deliver excellent development returns. Numerous other small non-profit SME finance models similar to this existed at the time but none addressed the needs of the missing middle in a scale-able, nor financially sustainable way. They were all dependent on continued grant finance which inhibited the development of a growth finance asset class that is widely supported by the finance community.  Recognizing the need in the market I took the decision in 2004 to devote my time to the creation of a commercial for profit business that can address the needs of the ‘missing middle.  At a very early stage of GroFins life we teamed up with Shell Foundation who shared a similar vision to develop a commercial and scale-able solution that can be replicated through-out the developing world.  We firstly defined our SME target market. It was to be entrepreneurs that needed less than a $1 million in finance as above this level the maturity and sophistication of the enterprise appeals to private equity players and corporate financiers. We set the lower limit at $50,000 as below this level the informal nature of the businesses is better suited to microfinance. We developed a finance approach that accommodated the added complexities of working with the entrepreneurs that had limited track record and collateral and in the majority of the cases did not want an equity partner. These entrepreneurs need a viability based risk financier that understand and support their financial needs and assist them with business development assistance through all stages of their business development. Most importantly the finance decision is to be based on the ability of the entrepreneurial team and the viability of the business plan. Our goal was to ensure that nine out of ten businesses we finance become financially sustainable. To achieve this we use an integrated product and service approach that make both appropriate medium term (four to six year) risk finance available as well as ongoing pre- and post investment business development assistance to the investee company.  The GroFin finance instrument of choice is self liquidating. The required risk adjusted return is achieved by structuring a term loan with a market related interest rate in accordance with the cash flow characteristics of the business. In addition to the term loan an incentive is earned based on the turnover of the business to ensure that the transaction return is commensurate with the risk taken. This approach delivers equity type returns but without the usual exit problems that is associated with holding a share position in a small private company. Every GroFin SME client receives business development assistance to ensure a viable business plan is in hand before disbursement of finance followed by further business development after the flow of finance to ensure business profitability and thus repayment in accordance with the sought after transaction return. Through this integrated approach GroFin have to date done 146 transactions, 26% of them start-ups. The average transaction size is USD 358,000 and the average collateral cover is a low 40% with an average transaction term of 50 months. These financed businesses create significant value in the market place. Each transaction creates on average 15 new jobs and the GroFin portfolio companies now employ a total of 4112 personnel with a further 64,500 beneficiaries benefitting directly from the USD 52 million so invested. The cost per job created is a low USD 13,000 per position. The write off rate is less than 5% and more than 95% of the business is in operation which is significantly better than the market average and a true indication of the value of the structured finance and the ongoing business development assistance.  These businesses manufacture and deliver a wide range of goods and services and are all formal businesses that contribute significantly to the local economy. None of this is off course possible without the necessary investment capital and support of numerous investors. To develop an attractive asset class for investors the GroFin model had to deliver both measurable development returns as well as acceptable financial returns. Through two pilot funds established in 2004 GroFin demonstrated the return potential of investing risk finance in SMEs. GroFins target net returns to investors are 5 to 10% net after costs and write-offs to investors in USD terms. Performance to date is in line with modelling with gross portfolio returns between 15 and 20% in the different funds. The average IRR achieved on the first 14 exits is 25% proving wrong the belief that risk finance at this level is not commercially sustainable. A total of 21 investors have invested in GroFin funds and by the end of 2008 funds under management totalled $230 million making GroFin the biggest growth finance fund manager in Africa.  With the support of Shell Foundation and other development partners GroFin developed strong operational capability. The integrated product and service approach GroFin uses is very hands-on calling for local teams that that can work closely with the businesses to assess their needs  and deliver the necessary finance and business development assistance. The GroFin team now numbers 90 people operating  from ten offices in nine countries and has the capacity to do 140 transactions annually at a value of USD 50 million per annum. With annual fund management and services income approaching USD 10 million GroFin is the first profitable stand alone growth finance fund management company of size. The GroFin model delivers value at the market, SME client, investor, employee and shareholder level and it does this in a sector which few thought of as financially viable. It is this performance that makes us strong believers in the future of growth finance as an attractive asset class that can deliver sustainable financial, social and economic results in the ever important developing world SME sector.Over a period of 25 years I started-up, developed and sold a dozen small and medium enterprises in a variety of sectors. As with most entrepreneurs I on numerous occasions approached a bank for start-up and growth finance. Where I did not have the collateral to secure the needed loan I failed in raising the finance notwithstanding my growing track record and entrepreneurial success. In the late nineties I managed to raise start-up and growth finance on three occasions from American and European non-profit developing country business developers. The total amount raised was $500,000 and with this we build a multi-disciplinary energy company that we later sold to international utilities, Electricite de France and Nuon together with senior management.  As part of the energy company we started a division that financed other start-up energy companies in Africa on behalf of the same US non-profit specialist investment service that assisted our start-up. Their model for finance was based on viability and addressed the entrepreneurs needs. It however did not fully address the needs of investors as returns were low due to high costs and write-offs nor was it a sustainable commercial business model that could be scaled and replicated the world over to address the growing need for viability based risk finance in developing countries. It did however deliver excellent development returns. Numerous other small non-profit SME finance models similar to this existed at the time but none addressed the needs of the missing middle in a scale-able, nor financially sustainable way. They were all dependent on continued grant finance which inhibited the development of a growth finance asset class that is widely supported by the finance community.  Recognizing the need in the market I took the decision in 2004 to devote my time to the creation of a commercial for profit business that can address the needs of the ‘missing middle.  At a very early stage of GroFins life we teamed up with Shell Foundation who shared a similar vision to develop a commercial and scale-able solution that can be replicated through-out the developing world.  We firstly defined our SME target market. It was to be entrepreneurs that needed less than a $1 million in finance as above this level the maturity and sophistication of the enterprise appeals to private equity players and corporate financiers. We set the lower limit at $50,000 as below this level the informal nature of the businesses is better suited to microfinance. We developed a finance approach that accommodated the added complexities of working with the entrepreneurs that had limited track record and collateral and in the majority of the cases did not want an equity partner. These entrepreneurs need a viability based risk financier that understand and support their financial needs and assist them with business development assistance through all stages of their business development. Most importantly the finance decision is to be based on the ability of the entrepreneurial team and the viability of the business plan. Our goal was to ensure that nine out of ten businesses we finance become financially sustainable. To achieve this we use an integrated product and service approach that make both appropriate medium term (four to six year) risk finance available as well as ongoing pre- and post investment business development assistance to the investee company.  The GroFin finance instrument of choice is self liquidating. The required risk adjusted return is achieved by structuring a term loan with a market related interest rate in accordance with the cash flow characteristics of the business. In addition to the term loan an incentive is earned based on the turnover of the business to ensure that the transaction return is commensurate with the risk taken. This approach delivers equity type returns but without the usual exit problems that is associated with holding a share position in a small private company. Every GroFin SME client receives business development assistance to ensure a viable business plan is in hand before disbursement of finance followed by further business development after the flow of finance to ensure business profitability and thus repayment in accordance with the sought after transaction return. Through this integrated approach GroFin have to date done 146 transactions, 26% of them start-ups. The average transaction size is USD 358,000 and the average collateral cover is a low 40% with an average transaction term of 50 months. These financed businesses create significant value in the market place. Each transaction creates on average 15 new jobs and the GroFin portfolio companies now employ a total of 4112 personnel with a further 64,500 beneficiaries benefitting directly from the USD 52 million so invested. The cost per job created is a low USD 13,000 per position. The write off rate is less than 5% and more than 95% of the business is in operation which is significantly better than the market average and a true indication of the value of the structured finance and the ongoing business development assistance.  These businesses manufacture and deliver a wide range of goods and services and are all formal businesses that contribute significantly to the local economy. None of this is off course possible without the necessary investment capital and support of numerous investors. To develop an attractive asset class for investors the GroFin model had to deliver both measurable development returns as well as acceptable financial returns. Through two pilot funds established in 2004 GroFin demonstrated the return potential of investing risk finance in SMEs. GroFins target net returns to investors are 5 to 10% net after costs and write-offs to investors in USD terms. Performance to date is in line with modelling with gross portfolio returns between 15 and 20% in the different funds. The average IRR achieved on the first 14 exits is 25% proving wrong the belief that risk finance at this level is not commercially sustainable. A total of 21 investors have invested in GroFin funds and by the end of 2008 funds under management totalled $230 million making GroFin the biggest growth finance fund manager in Africa.  With the support of Shell Foundation and other development partners GroFin developed strong operational capability. The integrated product and service approach GroFin uses is very hands-on calling for local teams that that can work closely with the businesses to assess their needs  and deliver the necessary finance and business development assistance. The GroFin team now numbers 90 people operating  from ten offices in nine countries and has the capacity to do 140 transactions annually at a value of USD 50 million per annum. With annual fund management and services income approaching USD 10 million GroFin is the first profitable stand alone growth finance fund management company of size. The GroFin model delivers value at the market, SME client, investor, employee and shareholder level and it does this in a sector which few thought of as financially viable. It is this performance that makes us strong believers in the future of growth finance as an attractive asset class that can deliver sustainable financial, social and economic results in the ever important developing world SME sector.Over a period of 25 years I started-up, developed and sold a dozen small and medium enterprises in a variety of sectors. As with most entrepreneurs I on numerous occasions approached a bank for start-up and growth finance. Where I did not have the collateral to secure the needed loan I failed in raising the finance notwithstanding my growing track record and entrepreneurial success. In the late nineties I managed to raise start-up and growth finance on three occasions from American and European non-profit developing country business developers. The total amount raised was $500,000 and with this we build a multi-disciplinary energy company that we later sold to international utilities, Electricite de France and Nuon together with senior management.  As part of the energy company we started a division that financed other start-up energy companies in Africa on behalf of the same US non-profit specialist investment service that assisted our start-up. Their model for finance was based on viability and addressed the entrepreneurs needs. It however did not fully address the needs of investors as returns were low due to high costs and write-offs nor was it a sustainable commercial business model that could be scaled and replicated the world over to address the growing need for viability based risk finance in developing countries. It did however deliver excellent development returns. Numerous other small non-profit SME finance models similar to this existed at the time but none addressed the needs of the missing middle in a scale-able, nor financially sustainable way. They were all dependent on continued grant finance which inhibited the development of a growth finance asset class that is widely supported by the finance community.  Recognizing the need in the market I took the decision in 2004 to devote my time to the creation of a commercial for profit business that can address the needs of the ‘missing middle.  At a very early stage of GroFins life we teamed up with Shell Foundation who shared a similar vision to develop a commercial and scale-able solution that can be replicated through-out the developing world.  We firstly defined our SME target market. It was to be entrepreneurs that needed less than a $1 million in finance as above this level the maturity and sophistication of the enterprise appeals to private equity players and corporate financiers. We set the lower limit at $50,000 as below this level the informal nature of the businesses is better suited to microfinance. We developed a finance approach that accommodated the added complexities of working with the entrepreneurs that had limited track record and collateral and in the majority of the cases did not want an equity partner. These entrepreneurs need a viability based risk financier that understand and support their financial needs and assist them with business development assistance through all stages of their business development. Most importantly the finance decision is to be based on the ability of the entrepreneurial team and the viability of the business plan. Our goal was to ensure that nine out of ten businesses we finance become financially sustainable. To achieve this we use an integrated product and service approach that make both appropriate medium term (four to six year) risk finance available as well as ongoing pre- and post investment business development assistance to the investee company.  The GroFin finance instrument of choice is self liquidating. The required risk adjusted return is achieved by structuring a term loan with a market related interest rate in accordance with the cash flow characteristics of the business. In addition to the term loan an incentive is earned based on the turnover of the business to ensure that the transaction return is commensurate with the risk taken. This approach delivers equity type returns but without the usual exit problems that is associated with holding a share position in a small private company. Every GroFin SME client receives business development assistance to ensure a viable business plan is in hand before disbursement of finance followed by further business development after the flow of finance to ensure business profitability and thus repayment in accordance with the sought after transaction return. Through this integrated approach GroFin have to date done 146 transactions, 26% of them start-ups. The average transaction size is USD 358,000 and the average collateral cover is a low 40% with an average transaction term of 50 months. These financed businesses create significant value in the market place. Each transaction creates on average 15 new jobs and the GroFin portfolio companies now employ a total of 4112 personnel with a further 64,500 beneficiaries benefitting directly from the USD 52 million so invested. The cost per job created is a low USD 13,000 per position. The write off rate is less than 5% and more than 95% of the business is in operation which is significantly better than the market average and a true indication of the value of the structured finance and the ongoing business development assistance.  These businesses manufacture and deliver a wide range of goods and services and are all formal businesses that contribute significantly to the local economy. None of this is off course possible without the necessary investment capital and support of numerous investors. To develop an attractive asset class for investors the GroFin model had to deliver both measurable development returns as well as acceptable financial returns. Through two pilot funds established in 2004 GroFin demonstrated the return potential of investing risk finance in SMEs. GroFins target net returns to investors are 5 to 10% net after costs and write-offs to investors in USD terms. Performance to date is in line with modelling with gross portfolio returns between 15 and 20% in the different funds. The average IRR achieved on the first 14 exits is 25% proving wrong the belief that risk finance at this level is not commercially sustainable. A total of 21 investors have invested in GroFin funds and by the end of 2008 funds under management totalled $230 million making GroFin the biggest growth finance fund manager in Africa.  With the support of Shell Foundation and other development partners GroFin developed strong operational capability. The integrated product and service approach GroFin uses is very hands-on calling for local teams that that can work closely with the businesses to assess their needs  and deliver the necessary finance and business development assistance. The GroFin team now numbers 90 people operating  from ten offices in nine countries and has the capacity to do 140 transactions annually at a value of USD 50 million per annum. With annual fund management and services income approaching USD 10 million GroFin is the first profitable stand alone growth finance fund management company of size. The GroFin model delivers value at the market, SME client, investor, employee and shareholder level and it does this in a sector which few thought of as financially viable. It is this performance that makes us strong believers in the future of growth finance as an attractive asset class that can deliver sustainable financial, social and economic results in the ever important developing world SME sector.Over a period of 25 years I started-up, developed and sold a dozen small and medium enterprises in a variety of sectors. As with most entrepreneurs I on numerous occasions approached a bank for start-up and growth finance. Where I did not have the collateral to secure the needed loan I failed in raising the finance notwithstanding my growing track record and entrepreneurial success. In the late nineties I managed to raise start-up and growth finance on three occasions from American and European non-profit developing country business developers. The total amount raised was $500,000 and with this we build a multi-disciplinary energy company that we later sold to international utilities, Electricite de France and Nuon together with senior management.  As part of the energy company we started a division that financed other start-up energy companies in Africa on behalf of the same US non-profit specialist investment service that assisted our start-up. Their model for finance was based on viability and addressed the entrepreneurs needs. It however did not fully address the needs of investors as returns were low due to high costs and write-offs nor was it a sustainable commercial business model that could be scaled and replicated the world over to address the growing need for viability based risk finance in developing countries. It did however deliver excellent development returns. Numerous other small non-profit SME finance models similar to this existed at the time but none addressed the needs of the missing middle in a scale-able, nor financially sustainable way. They were all dependent on continued grant finance which inhibited the development of a growth finance asset class that is widely supported by the finance community.  Recognizing the need in the market I took the decision in 2004 to devote my time to the creation of a commercial for profit business that can address the needs of the ‘missing middle.  At a very early stage of GroFins life we teamed up with Shell Foundation who shared a similar vision to develop a commercial and scale-able solution that can be replicated through-out the developing world.  We firstly defined our SME target market. It was to be entrepreneurs that needed less than a $1 million in finance as above this level the maturity and sophistication of the enterprise appeals to private equity players and corporate financiers. We set the lower limit at $50,000 as below this level the informal nature of the businesses is better suited to microfinance. We developed a finance approach that accommodated the added complexities of working with the entrepreneurs that had limited track record and collateral and in the majority of the cases did not want an equity partner. These entrepreneurs need a viability based risk financier that understand and support their financial needs and assist them with business development assistance through all stages of their business development. Most importantly the finance decision is to be based on the ability of the entrepreneurial team and the viability of the business plan. Our goal was to ensure that nine out of ten businesses we finance become financially sustainable. To achieve this we use an integrated product and service approach that make both appropriate medium term (four to six year) risk finance available as well as ongoing pre- and post investment business development assistance to the investee company.  The GroFin finance instrument of choice is self liquidating. The required risk adjusted return is achieved by structuring a term loan with a market related interest rate in accordance with the cash flow characteristics of the business. In addition to the term loan an incentive is earned based on the turnover of the business to ensure that the transaction return is commensurate with the risk taken. This approach delivers equity type returns but without the usual exit problems that is associated with holding a share position in a small private company. Every GroFin SME client receives business development assistance to ensure a viable business plan is in hand before disbursement of finance followed by further business development after the flow of finance to ensure business profitability and thus repayment in accordance with the sought after transaction return. Through this integrated approach GroFin have to date done 146 transactions, 26% of them start-ups. The average transaction size is USD 358,000 and the average collateral cover is a low 40% with an average transaction term of 50 months. These financed businesses create significant value in the market place. Each transaction creates on average 15 new jobs and the GroFin portfolio companies now employ a total of 4112 personnel with a further 64,500 beneficiaries benefitting directly from the USD 52 million so invested. The cost per job created is a low USD 13,000 per position. The write off rate is less than 5% and more than 95% of the business is in operation which is significantly better than the market average and a true indication of the value of the structured finance and the ongoing business development assistance.  These businesses manufacture and deliver a wide range of goods and services and are all formal businesses that contribute significantly to the local economy. None of this is off course possible without the necessary investment capital and support of numerous investors. To develop an attractive asset class for investors the GroFin model had to deliver both measurable development returns as well as acceptable financial returns. Through two pilot funds established in 2004 GroFin demonstrated the return potential of investing risk finance in SMEs. GroFins target net returns to investors are 5 to 10% net after costs and write-offs to investors in USD terms. Performance to date is in line with modelling with gross portfolio returns between 15 and 20% in the different funds. The average IRR achieved on the first 14 exits is 25% proving wrong the belief that risk finance at this level is not commercially sustainable. A total of 21 investors have invested in GroFin funds and by the end of 2008 funds under management totalled $230 million making GroFin the biggest growth finance fund manager in Africa.  With the support of Shell Foundation and other development partners GroFin developed strong operational capability. The integrated product and service approach GroFin uses is very hands-on calling for local teams that that can work closely with the businesses to assess their needs  and deliver the necessary finance and business development assistance. The GroFin team now numbers 90 people operating  from ten offices in nine countries and has the capacity to do 140 transactions annually at a value of USD 50 million per annum. With annual fund management and services income approaching USD 10 million GroFin is the first profitable stand alone growth finance fund management company of size. The GroFin model delivers value at the market, SME client, investor, employee and shareholder level and it does this in a sector which few thought of as financially viable. It is this performance that makes us strong believers in the future of growth finance as an attractive asset class that can deliver sustainable financial, social and economic results in the ever important developing world SME sector.Over a period of 25 years I started-up, developed and sold a dozen small and medium enterprises in a variety of sectors. As with most entrepreneurs I on numerous occasions approached a bank for start-up and growth finance. Where I did not have the collateral to secure the needed loan I failed in raising the finance notwithstanding my growing track record and entrepreneurial success. In the late nineties I managed to raise start-up and growth finance on three occasions from American and European non-profit developing country business developers. The total amount raised was $500,000 and with this we build a multi-disciplinary energy company that we later sold to international utilities, Electricite de France and Nuon together with senior management.  As part of the energy company we started a division that financed other start-up energy companies in Africa on behalf of the same US non-profit specialist investment service that assisted our start-up. Their model for finance was based on viability and addressed the entrepreneurs needs. It however did not fully address the needs of investors as returns were low due to high costs and write-offs nor was it a sustainable commercial business model that could be scaled and replicated the world over to address the growing need for viability based risk finance in developing countries. It did however deliver excellent development returns. Numerous other small non-profit SME finance models similar to this existed at the time but none addressed the needs of the missing middle in a scale-able, nor financially sustainable way. They were all dependent on continued grant finance which inhibited the development of a growth finance asset class that is widely supported by the finance community.  Recognizing the need in the market I took the decision in 2004 to devote my time to the creation of a commercial for profit business that can address the needs of the ‘missing middle.  At a very early stage of GroFins life we teamed up with Shell Foundation who shared a similar vision to develop a commercial and scale-able solution that can be replicated through-out the developing world.  We firstly defined our SME target market. It was to be entrepreneurs that needed less than a $1 million in finance as above this level the maturity and sophistication of the enterprise appeals to private equity players and corporate financiers. We set the lower limit at $50,000 as below this level the informal nature of the businesses is better suited to microfinance. We developed a finance approach that accommodated the added complexities of working with the entrepreneurs that had limited track record and collateral and in the majority of the cases did not want an equity partner. These entrepreneurs need a viability based risk financier that understand and support their financial needs and assist them with business development assistance through all stages of their business development. Most importantly the finance decision is to be based on the ability of the entrepreneurial team and the viability of the business plan. Our goal was to ensure that nine out of ten businesses we finance become financially sustainable. To achieve this we use an integrated product and service approach that make both appropriate medium term (four to six year) risk finance available as well as ongoing pre- and post investment business development assistance to the investee company.  The GroFin finance instrument of choice is self liquidating. The required risk adjusted return is achieved by structuring a term loan with a market related interest rate in accordance with the cash flow characteristics of the business. In addition to the term loan an incentive is earned based on the turnover of the business to ensure that the transaction return is commensurate with the risk taken. This approach delivers equity type returns but without the usual exit problems that is associated with holding a share position in a small private company. Every GroFin SME client receives business development assistance to ensure a viable business plan is in hand before disbursement of finance followed by further business development after the flow of finance to ensure business profitability and thus repayment in accordance with the sought after transaction return. Through this integrated approach GroFin have to date done 146 transactions, 26% of them start-ups. The average transaction size is USD 358,000 and the average collateral cover is a low 40% with an average transaction term of 50 months. These financed businesses create significant value in the market place. Each transaction creates on average 15 new jobs and the GroFin portfolio companies now employ a total of 4112 personnel with a further 64,500 beneficiaries benefitting directly from the USD 52 million so invested. The cost per job created is a low USD 13,000 per position. The write off rate is less than 5% and more than 95% of the business is in operation which is significantly better than the market average and a true indication of the value of the structured finance and the ongoing business development assistance.  These businesses manufacture and deliver a wide range of goods and services and are all formal businesses that contribute significantly to the local economy. None of this is off course possible without the necessary investment capital and support of numerous investors. To develop an attractive asset class for investors the GroFin model had to deliver both measurable development returns as well as acceptable financial returns. Through two pilot funds established in 2004 GroFin demonstrated the return potential of investing risk finance in SMEs. GroFins target net returns to investors are 5 to 10% net after costs and write-offs to investors in USD terms. Performance to date is in line with modelling with gross portfolio returns between 15 and 20% in the different funds. The average IRR achieved on the first 14 exits is 25% proving wrong the belief that risk finance at this level is not commercially sustainable. A total of 21 investors have invested in GroFin funds and by the end of 2008 funds under management totalled $230 million making GroFin the biggest growth finance fund manager in Africa.  With the support of Shell Foundation and other development partners GroFin developed strong operational capability. The integrated product and service approach GroFin uses is very hands-on calling for local teams that that can work closely with the businesses to assess their needs  and deliver the necessary finance and business development assistance. The GroFin team now numbers 90 people operating  from ten offices in nine countries and has the capacity to do 140 transactions annually at a value of USD 50 million per annum. With annual fund management and services income approaching USD 10 million GroFin is the first profitable stand alone growth finance fund management company of size. The GroFin model delivers value at the market, SME client, investor, employee and shareholder level and it does this in a sector which few thought of as financially viable. It is this performance that makes us strong believers in the future of growth finance as an attractive asset class that can deliver sustainable financial, social and economic results in the ever important developing world SME sector.Over a period of 25 years I started-up, developed and sold a dozen small and medium enterprises in a variety of sectors. As with most entrepreneurs I on numerous occasions approached a bank for start-up and growth finance. Where I did not have the collateral to secure the needed loan I failed in raising the finance notwithstanding my growing track record and entrepreneurial success. In the late nineties I managed to raise start-up and growth finance on three occasions from American and European non-profit developing country business developers. The total amount raised was $500,000 and with this we build a multi-disciplinary energy company that we later sold to international utilities, Electricite de France and Nuon together with senior management.  As part of the energy company we started a division that financed other start-up energy companies in Africa on behalf of the same US non-profit specialist investment service that assisted our start-up. Their model for finance was based on viability and addressed the entrepreneurs needs. It however did not fully address the needs of investors as returns were low due to high costs and write-offs nor was it a sustainable commercial business model that could be scaled and replicated the world over to address the growing need for viability based risk finance in developing countries. It did however deliver excellent development returns. Numerous other small non-profit SME finance models similar to this existed at the time but none addressed the needs of the missing middle in a scale-able, nor financially sustainable way. They were all dependent on continued grant finance which inhibited the development of a growth finance asset class that is widely supported by the finance community.  Recognizing the need in the market I took the decision in 2004 to devote my time to the creation of a commercial for profit business that can address the needs of the ‘missing middle.  At a very early stage of GroFins life we teamed up with Shell Foundation who shared a similar vision to develop a commercial and scale-able solution that can be replicated through-out the developing world.  We firstly defined our SME target market. It was to be entrepreneurs that needed less than a $1 million in finance as above this level the maturity and sophistication of the enterprise appeals to private equity players and corporate financiers. We set the lower limit at $50,000 as below this level the informal nature of the businesses is better suited to microfinance. We developed a finance approach that accommodated the added complexities of working with the entrepreneurs that had limited track record and collateral and in the majority of the cases did not want an equity partner. These entrepreneurs need a viability based risk financier that understand and support their financial needs and assist them with business development assistance through all stages of their business development. Most importantly the finance decision is to be based on the ability of the entrepreneurial team and the viability of the business plan. Our goal was to ensure that nine out of ten businesses we finance become financially sustainable. To achieve this we use an integrated product and service approach that make both appropriate medium term (four to six year) risk finance available as well as ongoing pre- and post investment business development assistance to the investee company.  The GroFin finance instrument of choice is self liquidating. The required risk adjusted return is achieved by structuring a term loan with a market related interest rate in accordance with the cash flow characteristics of the business. In addition to the term loan an incentive is earned based on the turnover of the business to ensure that the transaction return is commensurate with the risk taken. This approach delivers equity type returns but without the usual exit problems that is associated with holding a share position in a small private company. Every GroFin SME client receives business development assistance to ensure a viable business plan is in hand before disbursement of finance followed by further business development after the flow of finance to ensure business profitability and thus repayment in accordance with the sought after transaction return. Through this integrated approach GroFin have to date done 146 transactions, 26% of them start-ups. The average transaction size is USD 358,000 and the average collateral cover is a low 40% with an average transaction term of 50 months. These financed businesses create significant value in the market place. Each transaction creates on average 15 new jobs and the GroFin portfolio companies now employ a total of 4112 personnel with a further 64,500 beneficiaries benefitting directly from the USD 52 million so invested. The cost per job created is a low USD 13,000 per position. The write off rate is less than 5% and more than 95% of the business is in operation which is significantly better than the market average and a true indication of the value of the structured finance and the ongoing business development assistance.  These businesses manufacture and deliver a wide range of goods and services and are all formal businesses that contribute significantly to the local economy. None of this is off course possible without the necessary investment capital and support of numerous investors. To develop an attractive asset class for investors the GroFin model had to deliver both measurable development returns as well as acceptable financial returns. Through two pilot funds established in 2004 GroFin demonstrated the return potential of investing risk finance in SMEs. GroFins target net returns to investors are 5 to 10% net after costs and write-offs to investors in USD terms. Performance to date is in line with modelling with gross portfolio returns between 15 and 20% in the different funds. The average IRR achieved on the first 14 exits is 25% proving wrong the belief that risk finance at this level is not commercially sustainable. A total of 21 investors have invested in GroFin funds and by the end of 2008 funds under management totalled $230 million making GroFin the biggest growth finance fund manager in Africa.  With the support of Shell Foundation and other development partners GroFin developed strong operational capability. The integrated product and service approach GroFin uses is very hands-on calling for local teams that that can work closely with the businesses to assess their needs  and deliver the necessary finance and business development assistance. The GroFin team now numbers 90 people operating  from ten offices in nine countries and has the capacity to do 140 transactions annually at a value of USD 50 million per annum. With annual fund management and services income approaching USD 10 million GroFin is the first profitable stand alone growth finance fund management company of size. The GroFin model delivers value at the market, SME client, investor, employee and shareholder level and it does this in a sector which few thought of as financially viable. It is this performance that makes us strong believers in the future of growth finance as an attractive asset class that can deliver sustainable financial, social and economic results in the ever important developing world SME sector.Over a period of 25 years I started-up, developed and sold a dozen small and medium enterprises in a variety of sectors. As with most entrepreneurs I on numerous occasions approached a bank for start-up and growth finance. Where I did not have the collateral to secure the needed loan I failed in raising the finance notwithstanding my growing track record and entrepreneurial success. In the late nineties I managed to raise start-up and growth finance on three occasions from American and European non-profit developing country business developers. The total amount raised was $500,000 and with this we build a multi-disciplinary energy company that we later sold to international utilities, Electricite de France and Nuon together with senior management.  As part of the energy company we started a division that financed other start-up energy companies in Africa on behalf of the same US non-profit specialist investment service that assisted our start-up. Their model for finance was based on viability and addressed the entrepreneurs needs. It however did not fully address the needs of investors as returns were low due to high costs and write-offs nor was it a sustainable commercial business model that could be scaled and replicated the world over to address the growing need for viability based risk finance in developing countries. It did however deliver excellent development returns. Numerous other small non-profit SME finance models similar to this existed at the time but none addressed the needs of the missing middle in a scale-able, nor financially sustainable way. They were all dependent on continued grant finance which inhibited the development of a growth finance asset class that is widely supported by the finance community.  Recognizing the need in the market I took the decision in 2004 to devote my time to the creation of a commercial for profit business that can address the needs of the ‘missing middle.  At a very early stage of GroFins life we teamed up with Shell Foundation who shared a similar vision to develop a commercial and scale-able solution that can be replicated through-out the developing world.  We firstly defined our SME target market. It was to be entrepreneurs that needed less than a $1 million in finance as above this level the maturity and sophistication of the enterprise appeals to private equity players and corporate financiers. We set the lower limit at $50,000 as below this level the informal nature of the businesses is better suited to microfinance. We developed a finance approach that accommodated the added complexities of working with the entrepreneurs that had limited track record and collateral and in the majority of the cases did not want an equity partner. These entrepreneurs need a viability based risk financier that understand and support their financial needs and assist them with business development assistance through all stages of their business development. Most importantly the finance decision is to be based on the ability of the entrepreneurial team and the viability of the business plan. Our goal was to ensure that nine out of ten businesses we finance become financially sustainable. To achieve this we use an integrated product and service approach that make both appropriate medium term (four to six year) risk finance available as well as ongoing pre- and post investment business development assistance to the investee company.  The GroFin finance instrument of choice is self liquidating. The required risk adjusted return is achieved by structuring a term loan with a market related interest rate in accordance with the cash flow characteristics of the business. In addition to the term loan an incentive is earned based on the turnover of the business to ensure that the transaction return is commensurate with the risk taken. This approach delivers equity type returns but without the usual exit problems that is associated with holding a share position in a small private company. Every GroFin SME client receives business development assistance to ensure a viable business plan is in hand before disbursement of finance followed by further business development after the flow of finance to ensure business profitability and thus repayment in accordance with the sought after transaction return. Through this integrated approach GroFin have to date done 146 transactions, 26% of them start-ups. The average transaction size is USD 358,000 and the average collateral cover is a low 40% with an average transaction term of 50 months. These financed businesses create significant value in the market place. Each transaction creates on average 15 new jobs and the GroFin portfolio companies now employ a total of 4112 personnel with a further 64,500 beneficiaries benefitting directly from the USD 52 million so invested. The cost per job created is a low USD 13,000 per position. The write off rate is less than 5% and more than 95% of the business is in operation which is significantly better than the market average and a true indication of the value of the structured finance and the ongoing business development assistance.  These businesses manufacture and deliver a wide range of goods and services and are all formal businesses that contribute significantly to the local economy. None of this is off course possible without the necessary investment capital and support of numerous investors. To develop an attractive asset class for investors the GroFin model had to deliver both measurable development returns as well as acceptable financial returns. Through two pilot funds established in 2004 GroFin demonstrated the return potential of investing risk finance in SMEs. GroFins target net returns to investors are 5 to 10% net after costs and write-offs to investors in USD terms. Performance to date is in line with modelling with gross portfolio returns between 15 and 20% in the different funds. The average IRR achieved on the first 14 exits is 25% proving wrong the belief that risk finance at this level is not commercially sustainable. A total of 21 investors have invested in GroFin funds and by the end of 2008 funds under management totalled $230 million making GroFin the biggest growth finance fund manager in Africa.  With the support of Shell Foundation and other development partners GroFin developed strong operational capability. The integrated product and service approach GroFin uses is very hands-on calling for local teams that that can work closely with the businesses to assess their needs  and deliver the necessary finance and business development assistance. The GroFin team now numbers 90 people operating  from ten offices in nine countries and has the capacity to do 140 transactions annually at a value of USD 50 million per annum. With annual fund management and services income approaching USD 10 million GroFin is the first profitable stand alone growth finance fund management company of size. The GroFin model delivers value at the market, SME client, investor, employee and shareholder level and it does this in a sector which few thought of as financially viable. It is this performance that makes us strong believers in the future of growth finance as an attractive asset class that can deliver sustainable financial, social and economic results in the ever important developing world SME sector.Over a period of 25 years I started-up, developed and sold a dozen small and medium enterprises in a variety of sectors. As with most entrepreneurs I on numerous occasions approached a bank for start-up and growth finance. Where I did not have the collateral to secure the needed loan I failed in raising the finance notwithstanding my growing track record and entrepreneurial success. In the late nineties I managed to raise start-up and growth finance on three occasions from American and European non-profit developing country business developers. The total amount raised was $500,000 and with this we build a multi-disciplinary energy company that we later sold to international utilities, Electricite de France and Nuon together with senior management.  As part of the energy company we started a division that financed other start-up energy companies in Africa on behalf of the same US non-profit specialist investment service that assisted our start-up. Their model for finance was based on viability and addressed the entrepreneurs needs. It however did not fully address the needs of investors as returns were low due to high costs and write-offs nor was it a sustainable commercial business model that could be scaled and replicated the world over to address the growing need for viability based risk finance in developing countries. It did however deliver excellent development returns. Numerous other small non-profit SME finance models similar to this existed at the time but none addressed the needs of the missing middle in a scale-able, nor financially sustainable way. They were all dependent on continued grant finance which inhibited the development of a growth finance asset class that is widely supported by the finance community.  Recognizing the need in the market I took the decision in 2004 to devote my time to the creation of a commercial for profit business that can address the needs of the ‘missing middle.  At a very early stage of GroFins life we teamed up with Shell Foundation who shared a similar vision to develop a commercial and scale-able solution that can be replicated through-out the developing world.  We firstly defined our SME target market. It was to be entrepreneurs that needed less than a $1 million in finance as above this level the maturity and sophistication of the enterprise appeals to private equity players and corporate financiers. We set the lower limit at $50,000 as below this level the informal nature of the businesses is better suited to microfinance. We developed a finance approach that accommodated the added complexities of working with the entrepreneurs that had limited track record and collateral and in the majority of the cases did not want an equity partner. These entrepreneurs need a viability based risk financier that understand and support their financial needs and assist them with business development assistance through all stages of their business development. Most importantly the finance decision is to be based on the ability of the entrepreneurial team and the viability of the business plan. Our goal was to ensure that nine out of ten businesses we finance become financially sustainable. To achieve this we use an integrated product and service approach that make both appropriate medium term (four to six year) risk finance available as well as ongoing pre- and post investment business development assistance to the investee company.  The GroFin finance instrument of choice is self liquidating. The required risk adjusted return is achieved by structuring a term loan with a market related interest rate in accordance with the cash flow characteristics of the business. In addition to the term loan an incentive is earned based on the turnover of the business to ensure that the transaction return is commensurate with the risk taken. This approach delivers equity type returns but without the usual exit problems that is associated with holding a share position in a small private company. Every GroFin SME client receives business development assistance to ensure a viable business plan is in hand before disbursement of finance followed by further business development after the flow of finance to ensure business profitability and thus repayment in accordance with the sought after transaction return. Through this integrated approach GroFin have to date done 146 transactions, 26% of them start-ups. The average transaction size is USD 358,000 and the average collateral cover is a low 40% with an average transaction term of 50 months. These financed businesses create significant value in the market place. Each transaction creates on average 15 new jobs and the GroFin portfolio companies now employ a total of 4112 personnel with a further 64,500 beneficiaries benefitting directly from the USD 52 million so invested. The cost per job created is a low USD 13,000 per position. The write off rate is less than 5% and more than 95% of the business is in operation which is significantly better than the market average and a true indication of the value of the structured finance and the ongoing business development assistance.  These businesses manufacture and deliver a wide range of goods and services and are all formal businesses that contribute significantly to the local economy. None of this is off course possible without the necessary investment capital and support of numerous investors. To develop an attractive asset class for investors the GroFin model had to deliver both measurable development returns as well as acceptable financial returns. Through two pilot funds established in 2004 GroFin demonstrated the return potential of investing risk finance in SMEs. GroFins target net returns to investors are 5 to 10% net after costs and write-offs to investors in USD terms. Performance to date is in line with modelling with gross portfolio returns between 15 and 20% in the different funds. The average IRR achieved on the first 14 exits is 25% proving wrong the belief that risk finance at this level is not commercially sustainable. A total of 21 investors have invested in GroFin funds and by the end of 2008 funds under management totalled $230 million making GroFin the biggest growth finance fund manager in Africa.  With the support of Shell Foundation and other development partners GroFin developed strong operational capability. The integrated product and service approach GroFin uses is very hands-on calling for local teams that that can work closely with the businesses to assess their needs  and deliver the necessary finance and business development assistance. The GroFin team now numbers 90 people operating  from ten offices in nine countries and has the capacity to do 140 transactions annually at a value of USD 50 million per annum. With annual fund management and services income approaching USD 10 million GroFin is the first profitable stand alone growth finance fund management company of size. The GroFin model delivers value at the market, SME client, investor, employee and shareholder level and it does this in a sector which few thought of as financially viable. It is this performance that makes us strong believers in the future of growth finance as an attractive asset class that can deliver sustainable financial, social and economic results in the ever important developing world SME sector.Over a period of 25 years I started-up, developed and sold a dozen small and medium enterprises in a variety of sectors. As with most entrepreneurs I on numerous occasions approached a bank for start-up and growth finance. Where I did not have the collateral to secure the needed loan I failed in raising the finance notwithstanding my growing track record and entrepreneurial success. In the late nineties I managed to raise start-up and growth finance on three occasions from American and European non-profit developing country business developers. The total amount raised was $500,000 and with this we build a multi-disciplinary energy company that we later sold to international utilities, Electricite de France and Nuon together with senior management.  As part of the energy company we started a division that financed other start-up energy companies in Africa on behalf of the same US non-profit specialist investment service that assisted our start-up. Their model for finance was based on viability and addressed the entrepreneurs needs. It however did not fully address the needs of investors as returns were low due to high costs and write-offs nor was it a sustainable commercial business model that could be scaled and replicated the world over to address the growing need for viability based risk finance in developing countries. It did however deliver excellent development returns. Numerous other small non-profit SME finance models similar to this existed at the time but none addressed the needs of the missing middle in a scale-able, nor financially sustainable way. They were all dependent on continued grant finance which inhibited the development of a growth finance asset class that is widely supported by the finance community.  Recognizing the need in the market I took the decision in 2004 to devote my time to the creation of a commercial for profit business that can address the needs of the ‘missing middle.  At a very early stage of GroFins life we teamed up with Shell Foundation who shared a similar vision to develop a commercial and scale-able solution that can be replicated through-out the developing world.  We firstly defined our SME target market. It was to be entrepreneurs that needed less than a $1 million in finance as above this level the maturity and sophistication of the enterprise appeals to private equity players and corporate financiers. We set the lower limit at $50,000 as below this level the informal nature of the businesses is better suited to microfinance. We developed a finance approach that accommodated the added complexities of working with the entrepreneurs that had limited track record and collateral and in the majority of the cases did not want an equity partner. These entrepreneurs need a viability based risk financier that understand and support their financial needs and assist them with business development assistance through all stages of their business development. Most importantly the finance decision is to be based on the ability of the entrepreneurial team and the viability of the business plan. Our goal was to ensure that nine out of ten businesses we finance become financially sustainable. To achieve this we use an integrated product and service approach that make both appropriate medium term (four to six year) risk finance available as well as ongoing pre- and post investment business development assistance to the investee company.  The GroFin finance instrument of choice is self liquidating. The required risk adjusted return is achieved by structuring a term loan with a market related interest rate in accordance with the cash flow characteristics of the business. In addition to the term loan an incentive is earned based on the turnover of the business to ensure that the transaction return is commensurate with the risk taken. This approach delivers equity type returns but without the usual exit problems that is associated with holding a share position in a small private company. Every GroFin SME client receives business development assistance to ensure a viable business plan is in hand before disbursement of finance followed by further business development after the flow of finance to ensure business profitability and thus repayment in accordance with the sought after transaction return. Through this integrated approach GroFin have to date done 146 transactions, 26% of them start-ups. The average transaction size is USD 358,000 and the average collateral cover is a low 40% with an average transaction term of 50 months. These financed businesses create significant value in the market place. Each transaction creates on average 15 new jobs and the GroFin portfolio companies now employ a total of 4112 personnel with a further 64,500 beneficiaries benefitting directly from the USD 52 million so invested. The cost per job created is a low USD 13,000 per position. The write off rate is less than 5% and more than 95% of the business is in operation which is significantly better than the market average and a true indication of the value of the structured finance and the ongoing business development assistance.  These businesses manufacture and deliver a wide range of goods and services and are all formal businesses that contribute significantly to the local economy. None of this is off course possible without the necessary investment capital and support of numerous investors. To develop an attractive asset class for investors the GroFin model had to deliver both measurable development returns as well as acceptable financial returns. Through two pilot funds established in 2004 GroFin demonstrated the return potential of investing risk finance in SMEs. GroFins target net returns to investors are 5 to 10% net after costs and write-offs to investors in USD terms. Performance to date is in line with modelling with gross portfolio returns between 15 and 20% in the different funds. The average IRR achieved on the first 14 exits is 25% proving wrong the belief that risk finance at this level is not commercially sustainable. A total of 21 investors have invested in GroFin funds and by the end of 2008 funds under management totalled $230 million making GroFin the biggest growth finance fund manager in Africa.  With the support of Shell Foundation and other development partners GroFin developed strong operational capability. The integrated product and service approach GroFin uses is very hands-on calling for local teams that that can work closely with the businesses to assess their needs  and deliver the necessary finance and business development assistance. The GroFin team now numbers 90 people operating  from ten offices in nine countries and has the capacity to do 140 transactions annually at a value of USD 50 million per annum. With annual fund management and services income approaching USD 10 million GroFin is the first profitable stand alone growth finance fund management company of size. The GroFin model delivers value at the market, SME client, investor, employee and shareholder level and it does this in a sector which few thought of as financially viable. It is this performance that makes us strong believers in the future of growth finance as an attractive asset class that can deliver sustainable financial, social and economic results in the ever important developing world SME sector.Over a period of 25 years I started-up, developed and sold a dozen small and medium enterprises in a variety of sectors. As with most entrepreneurs I on numerous occasions approached a bank for start-up and growth finance. Where I did not have the collateral to secure the needed loan I failed in raising the finance notwithstanding my growing track record and entrepreneurial success. In the late nineties I managed to raise start-up and growth finance on three occasions from American and European non-profit developing country business developers. The total amount raised was $500,000 and with this we build a multi-disciplinary energy company that we later sold to international utilities, Electricite de France and Nuon together with senior management.  As part of the energy company we started a division that financed other start-up energy companies in Africa on behalf of the same US non-profit specialist investment service that assisted our start-up. Their model for finance was based on viability and addressed the entrepreneurs needs. It however did not fully address the needs of investors as returns were low due to high costs and write-offs nor was it a sustainable commercial business model that could be scaled and replicated the world over to address the growing need for viability based risk finance in developing countries. It did however deliver excellent development returns. Numerous other small non-profit SME finance models similar to this existed at the time but none addressed the needs of the missing middle in a scale-able, nor financially sustainable way. They were all dependent on continued grant finance which inhibited the development of a growth finance asset class that is widely supported by the finance community.  Recognizing the need in the market I took the decision in 2004 to devote my time to the creation of a commercial for profit business that can address the needs of the ‘missing middle.  At a very early stage of GroFins life we teamed up with Shell Foundation who shared a similar vision to develop a commercial and scale-able solution that can be replicated through-out the developing world.  We firstly defined our SME target market. It was to be entrepreneurs that needed less than a $1 million in finance as above this level the maturity and sophistication of the enterprise appeals to private equity players and corporate financiers. We set the lower limit at $50,000 as below this level the informal nature of the businesses is better suited to microfinance. We developed a finance approach that accommodated the added complexities of working with the entrepreneurs that had limited track record and collateral and in the majority of the cases did not want an equity partner. These entrepreneurs need a viability based risk financier that understand and support their financial needs and assist them with business development assistance through all stages of their business development. Most importantly the finance decision is to be based on the ability of the entrepreneurial team and the viability of the business plan. Our goal was to ensure that nine out of ten businesses we finance become financially sustainable. To achieve this we use an integrated product and service approach that make both appropriate medium term (four to six year) risk finance available as well as ongoing pre- and post investment business development assistance to the investee company.  The GroFin finance instrument of choice is self liquidating. The required risk adjusted return is achieved by structuring a term loan with a market related interest rate in accordance with the cash flow characteristics of the business. In addition to the term loan an incentive is earned based on the turnover of the business to ensure that the transaction return is commensurate with the risk taken. This approach delivers equity type returns but without the usual exit problems that is associated with holding a share position in a small private company. Every GroFin SME client receives business development assistance to ensure a viable business plan is in hand before disbursement of finance followed by further business development after the flow of finance to ensure business profitability and thus repayment in accordance with the sought after transaction return. Through this integrated approach GroFin have to date done 146 transactions, 26% of them start-ups. The average transaction size is USD 358,000 and the average collateral cover is a low 40% with an average transaction term of 50 months. These financed businesses create significant value in the market place. Each transaction creates on average 15 new jobs and the GroFin portfolio companies now employ a total of 4112 personnel with a further 64,500 beneficiaries benefitting directly from the USD 52 million so invested. The cost per job created is a low USD 13,000 per position. The write off rate is less than 5% and more than 95% of the business is in operation which is significantly better than the market average and a true indication of the value of the structured finance and the ongoing business development assistance.  These businesses manufacture and deliver a wide range of goods and services and are all formal businesses that contribute significantly to the local economy. None of this is off course possible without the necessary investment capital and support of numerous investors. To develop an attractive asset class for investors the GroFin model had to deliver both measurable development returns as well as acceptable financial returns. Through two pilot funds established in 2004 GroFin demonstrated the return potential of investing risk finance in SMEs. GroFins target net returns to investors are 5 to 10% net after costs and write-offs to investors in USD terms. Performance to date is in line with modelling with gross portfolio returns between 15 and 20% in the different funds. The average IRR achieved on the first 14 exits is 25% proving wrong the belief that risk finance at this level is not commercially sustainable. A total of 21 investors have invested in GroFin funds and by the end of 2008 funds under management totalled $230 million making GroFin the biggest growth finance fund manager in Africa.  With the support of Shell Foundation and other development partners GroFin developed strong operational capability. The integrated product and service approach GroFin uses is very hands-on calling for local teams that that can work closely with the businesses to assess their needs  and deliver the necessary finance and business development assistance. The GroFin team now numbers 90 people operating  from ten offices in nine countries and has the capacity to do 140 transactions annually at a value of USD 50 million per annum. With annual fund management and services income approaching USD 10 million GroFin is the first profitable stand alone growth finance fund management company of size. The GroFin model delivers value at the market, SME client, investor, employee and shareholder level and it does this in a sector which few thought of as financially viable. It is this performance that makes us strong believers in the future of growth finance as an attractive asset class that can deliver sustainable financial, social and economic results in the ever important developing world SME sector.Over a period of 25 years I started-up, developed and sold a dozen small and medium enterprises in a variety of sectors. As with most entrepreneurs I on numerous occasions approached a bank for start-up and growth finance. Where I did not have the collateral to secure the needed loan I failed in raising the finance notwithstanding my growing track record and entrepreneurial success. In the late nineties I managed to raise start-up and growth finance on three occasions from American and European non-profit developing country business developers. The total amount raised was $500,000 and with this we build a multi-disciplinary energy company that we later sold to international utilities, Electricite de France and Nuon together with senior management.  As part of the energy company we started a division that financed other start-up energy companies in Africa on behalf of the same US non-profit specialist investment service that assisted our start-up. Their model for finance was based on viability and addressed the entrepreneurs needs. It however did not fully address the needs of investors as returns were low due to high costs and write-offs nor was it a sustainable commercial business model that could be scaled and replicated the world over to address the growing need for viability based risk finance in developing countries. It did however deliver excellent development returns. Numerous other small non-profit SME finance models similar to this existed at the time but none addressed the needs of the missing middle in a scale-able, nor financially sustainable way. They were all dependent on continued grant finance which inhibited the development of a growth finance asset class that is widely supported by the finance community.  Recognizing the need in the market I took the decision in 2004 to devote my time to the creation of a commercial for profit business that can address the needs of the ‘missing middle.  At a very early stage of GroFins life we teamed up with Shell Foundation who shared a similar vision to develop a commercial and scale-able solution that can be replicated through-out the developing world.  We firstly defined our SME target market. It was to be entrepreneurs that needed less than a $1 million in finance as above this level the maturity and sophistication of the enterprise appeals to private equity players and corporate financiers. We set the lower limit at $50,000 as below this level the informal nature of the businesses is better suited to microfinance. We developed a finance approach that accommodated the added complexities of working with the entrepreneurs that had limited track record and collateral and in the majority of the cases did not want an equity partner. These entrepreneurs need a viability based risk financier that understand and support their financial needs and assist them with business development assistance through all stages of their business development. Most importantly the finance decision is to be based on the ability of the entrepreneurial team and the viability of the business plan. Our goal was to ensure that nine out of ten businesses we finance become financially sustainable. To achieve this we use an integrated product and service approach that make both appropriate medium term (four to six year) risk finance available as well as ongoing pre- and post investment business development assistance to the investee company.  The GroFin finance instrument of choice is self liquidating. The required risk adjusted return is achieved by structuring a term loan with a market related interest rate in accordance with the cash flow characteristics of the business. In addition to the term loan an incentive is earned based on the turnover of the business to ensure that the transaction return is commensurate with the risk taken. This approach delivers equity type returns but without the usual exit problems that is associated with holding a share position in a small private company. Every GroFin SME client receives business development assistance to ensure a viable business plan is in hand before disbursement of finance followed by further business development after the flow of finance to ensure business profitability and thus repayment in accordance with the sought after transaction return. Through this integrated approach GroFin have to date done 146 transactions, 26% of them start-ups. The average transaction size is USD 358,000 and the average collateral cover is a low 40% with an average transaction term of 50 months. These financed businesses create significant value in the market place. Each transaction creates on average 15 new jobs and the GroFin portfolio companies now employ a total of 4112 personnel with a further 64,500 beneficiaries benefitting directly from the USD 52 million so invested. The cost per job created is a low USD 13,000 per position. The write off rate is less than 5% and more than 95% of the business is in operation which is significantly better than the market average and a true indication of the value of the structured finance and the ongoing business development assistance.  These businesses manufacture and deliver a wide range of goods and services and are all formal businesses that contribute significantly to the local economy. None of this is off course possible without the necessary investment capital and support of numerous investors. To develop an attractive asset class for investors the GroFin model had to deliver both measurable development returns as well as acceptable financial returns. Through two pilot funds established in 2004 GroFin demonstrated the return potential of investing risk finance in SMEs. GroFins target net returns to investors are 5 to 10% net after costs and write-offs to investors in USD terms. Performance to date is in line with modelling with gross portfolio returns between 15 and 20% in the different funds. The average IRR achieved on the first 14 exits is 25% proving wrong the belief that risk finance at this level is not commercially sustainable. A total of 21 investors have invested in GroFin funds and by the end of 2008 funds under management totalled $230 million making GroFin the biggest growth finance fund manager in Africa.  With the support of Shell Foundation and other development partners GroFin developed strong operational capability. The integrated product and service approach GroFin uses is very hands-on calling for local teams that that can work closely with the businesses to assess their needs  and deliver the necessary finance and business development assistance. The GroFin team now numbers 90 people operating  from ten offices in nine countries and has the capacity to do 140 transactions annually at a value of USD 50 million per annum. With annual fund management and services income approaching USD 10 million GroFin is the first profitable stand alone growth finance fund management company of size. The GroFin model delivers value at the market, SME client, investor, employee and shareholder level and it does this in a sector which few thought of as financially viable. It is this performance that makes us strong believers in the future of growth finance as an attractive asset class that can deliver sustainable financial, social and economic results in the ever important developing world SME sector.Over a period of 25 years I started-up, developed and sold a dozen small and medium enterprises in a variety of sectors. As with most entrepreneurs I on numerous occasions approached a bank for start-up and growth finance. Where I did not have the collateral to secure the needed loan I failed in raising the finance notwithstanding my growing track record and entrepreneurial success. In the late nineties I managed to raise start-up and growth finance on three occasions from American and European non-profit developing country business developers. The total amount raised was $500,000 and with this we build a multi-disciplinary energy company that we later sold to international utilities, Electricite de France and Nuon together with senior management.  As part of the energy company we started a division that financed other start-up energy companies in Africa on behalf of the same US non-profit specialist investment service that assisted our start-up. Their model for finance was based on viability and addressed the entrepreneurs needs. It however did not fully address the needs of investors as returns were low due to high costs and write-offs nor was it a sustainable commercial business model that could be scaled and replicated the world over to address the growing need for viability based risk finance in developing countries. It did however deliver excellent development returns. Numerous other small non-profit SME finance models similar to this existed at the time but none addressed the needs of the missing middle in a scale-able, nor financially sustainable way. They were all dependent on continued grant finance which inhibited the development of a growth finance asset class that is widely supported by the finance community.  Recognizing the need in the market I took the decision in 2004 to devote my time to the creation of a commercial for profit business that can address the needs of the ‘missing middle.  At a very early stage of GroFins life we teamed up with Shell Foundation who shared a similar vision to develop a commercial and scale-able solution that can be replicated through-out the developing world.  We firstly defined our SME target market. It was to be entrepreneurs that needed less than a $1 million in finance as above this level the maturity and sophistication of the enterprise appeals to private equity players and corporate financiers. We set the lower limit at $50,000 as below this level the informal nature of the businesses is better suited to microfinance. We developed a finance approach that accommodated the added complexities of working with the entrepreneurs that had limited track record and collateral and in the majority of the cases did not want an equity partner. These entrepreneurs need a viability based risk financier that understand and support their financial needs and assist them with business development assistance through all stages of their business development. Most importantly the finance decision is to be based on the ability of the entrepreneurial team and the viability of the business plan. Our goal was to ensure that nine out of ten businesses we finance become financially sustainable. To achieve this we use an integrated product and service approach that make both appropriate medium term (four to six year) risk finance available as well as ongoing pre- and post investment business development assistance to the investee company.  The GroFin finance instrument of choice is self liquidating. The required risk adjusted return is achieved by structuring a term loan with a market related interest rate in accordance with the cash flow characteristics of the business. In addition to the term loan an incentive is earned based on the turnover of the business to ensure that the transaction return is commensurate with the risk taken. This approach delivers equity type returns but without the usual exit problems that is associated with holding a share position in a small private company. Every GroFin SME client receives business development assistance to ensure a viable business plan is in hand before disbursement of finance followed by further business development after the flow of finance to ensure business profitability and thus repayment in accordance with the sought after transaction return. Through this integrated approach GroFin have to date done 146 transactions, 26% of them start-ups. The average transaction size is USD 358,000 and the average collateral cover is a low 40% with an average transaction term of 50 months. These financed businesses create significant value in the market place. Each transaction creates on average 15 new jobs and the GroFin portfolio companies now employ a total of 4112 personnel with a further 64,500 beneficiaries benefitting directly from the USD 52 million so invested. The cost per job created is a low USD 13,000 per position. The write off rate is less than 5% and more than 95% of the business is in operation which is significantly better than the market average and a true indication of the value of the structured finance and the ongoing business development assistance.  These businesses manufacture and deliver a wide range of goods and services and are all formal businesses that contribute significantly to the local economy. None of this is off course possible without the necessary investment capital and support of numerous investors. To develop an attractive asset class for investors the GroFin model had to deliver both measurable development returns as well as acceptable financial returns. Through two pilot funds established in 2004 GroFin demonstrated the return potential of investing risk finance in SMEs. GroFins target net returns to investors are 5 to 10% net after costs and write-offs to investors in USD terms. Performance to date is in line with modelling with gross portfolio returns between 15 and 20% in the different funds. The average IRR achieved on the first 14 exits is 25% proving wrong the belief that risk finance at this level is not commercially sustainable. A total of 21 investors have invested in GroFin funds and by the end of 2008 funds under management totalled $230 million making GroFin the biggest growth finance fund manager in Africa.  With the support of Shell Foundation and other development partners GroFin developed strong operational capability. The integrated product and service approach GroFin uses is very hands-on calling for local teams that that can work closely with the businesses to assess their needs  and deliver the necessary finance and business development assistance. The GroFin team now numbers 90 people operating  from ten offices in nine countries and has the capacity to do 140 transactions annually at a value of USD 50 million per annum. With annual fund management and services income approaching USD 10 million GroFin is the first profitable stand alone growth finance fund management company of size. The GroFin model delivers value at the market, SME client, investor, employee and shareholder level and it does this in a sector which few thought of as financially viable. It is this performance that makes us strong believers in the future of growth finance as an attractive asset class that can deliver sustainable financial, social and economic results in the ever important developing world SME sector.Over a period of 25 years I started-up, developed and sold a dozen small and medium enterprises in a variety of sectors. As with most entrepreneurs I on numerous occasions approached a bank for start-up and growth finance. Where I did not have the collateral to secure the needed loan I failed in raising the finance notwithstanding my growing track record and entrepreneurial success. In the late nineties I managed to raise start-up and growth finance on three occasions from American and European non-profit developing country business developers. The total amount raised was $500,000 and with this we build a multi-disciplinary energy company that we later sold to international utilities, Electricite de France and Nuon together with senior management.  As part of the energy company we started a division that financed other start-up energy companies in Africa on behalf of the same US non-profit specialist investment service that assisted our start-up. Their model for finance was based on viability and addressed the entrepreneurs needs. It however did not fully address the needs of investors as returns were low due to high costs and write-offs nor was it a sustainable commercial business model that could be scaled and replicated the world over to address the growing need for viability based risk finance in developing countries. It did however deliver excellent development returns. Numerous other small non-profit SME finance models similar to this existed at the time but none addressed the needs of the missing middle in a scale-able, nor financially sustainable way. They were all dependent on continued grant finance which inhibited the development of a growth finance asset class that is widely supported by the finance community.  Recognizing the need in the market I took the decision in 2004 to devote my time to the creation of a commercial for profit business that can address the needs of the ‘missing middle.  At a very early stage of GroFins life we teamed up with Shell Foundation who shared a similar vision to develop a commercial and scale-able solution that can be replicated through-out the developing world.  We firstly defined our SME target market. It was to be entrepreneurs that needed less than a $1 million in finance as above this level the maturity and sophistication of the enterprise appeals to private equity players and corporate financiers. We set the lower limit at $50,000 as below this level the informal nature of the businesses is better suited to microfinance. We developed a finance approach that accommodated the added complexities of working with the entrepreneurs that had limited track record and collateral and in the majority of the cases did not want an equity partner. These entrepreneurs need a viability based risk financier that understand and support their financial needs and assist them with business development assistance through all stages of their business development. Most importantly the finance decision is to be based on the ability of the entrepreneurial team and the viability of the business plan. Our goal was to ensure that nine out of ten businesses we finance become financially sustainable. To achieve this we use an integrated product and service approach that make both appropriate medium term (four to six year) risk finance available as well as ongoing pre- and post investment business development assistance to the investee company.  The GroFin finance instrument of choice is self liquidating. The required risk adjusted return is achieved by structuring a term loan with a market related interest rate in accordance with the cash flow characteristics of the business. In addition to the term loan an incentive is earned based on the turnover of the business to ensure that the transaction return is commensurate with the risk taken. This approach delivers equity type returns but without the usual exit problems that is associated with holding a share position in a small private company. Every GroFin SME client receives business development assistance to ensure a viable business plan is in hand before disbursement of finance followed by further business development after the flow of finance to ensure business profitability and thus repayment in accordance with the sought after transaction return. Through this integrated approach GroFin have to date done 146 transactions, 26% of them start-ups. The average transaction size is USD 358,000 and the average collateral cover is a low 40% with an average transaction term of 50 months. These financed businesses create significant value in the market place. Each transaction creates on average 15 new jobs and the GroFin portfolio companies now employ a total of 4112 personnel with a further 64,500 beneficiaries benefitting directly from the USD 52 million so invested. The cost per job created is a low USD 13,000 per position. The write off rate is less than 5% and more than 95% of the business is in operation which is significantly better than the market average and a true indication of the value of the structured finance and the ongoing business development assistance.  These businesses manufacture and deliver a wide range of goods and services and are all formal businesses that contribute significantly to the local economy. None of this is off course possible without the necessary investment capital and support of numerous investors. To develop an attractive asset class for investors the GroFin model had to deliver both measurable development returns as well as acceptable financial returns. Through two pilot funds established in 2004 GroFin demonstrated the return potential of investing risk finance in SMEs. GroFins target net returns to investors are 5 to 10% net after costs and write-offs to investors in USD terms. Performance to date is in line with modelling with gross portfolio returns between 15 and 20% in the different funds. The average IRR achieved on the first 14 exits is 25% proving wrong the belief that risk finance at this level is not commercially sustainable. A total of 21 investors have invested in GroFin funds and by the end of 2008 funds under management totalled $230 million making GroFin the biggest growth finance fund manager in Africa.  With the support of Shell Foundation and other development partners GroFin developed strong operational capability. The integrated product and service approach GroFin uses is very hands-on calling for local teams that that can work closely with the businesses to assess their needs  and deliver the necessary finance and business development assistance. The GroFin team now numbers 90 people operating  from ten offices in nine countries and has the capacity to do 140 transactions annually at a value of USD 50 million per annum. With annual fund management and services income approaching USD 10 million GroFin is the first profitable stand alone growth finance fund management company of size. The GroFin model delivers value at the market, SME client, investor, employee and shareholder level and it does this in a sector which few thought of as financially viable. It is this performance that makes us strong believers in the future of growth finance as an attractive asset class that can deliver sustainable financial, social and economic results in the ever important developing world SME sector.