Investing in local business
The private sector is the engine of economic growth. As The Netherlands, we support local entrepreneurs in developing economies. We assist companies to grow, while facilitating better conditions for companies to do business, create jobs and deliver products to markets in a responsible manner. Rosejoy restaurants in Ghana is an excellent example how smaller companies, with tailor-made support, serve consumers and drive economic growth, enabling people to earn their own living.
Image: Marcel Vernooij
In particular Small and Medium Enterprises (SMEs) generate income and create the majority of jobs in developing economies. So what do we have to offer to local companies which are eager to start or grow their business? Well, that depends on their demands and ambitions. Our embassies can offer opportunities to expand their local network, and link them to Dutch companies and experts. We also make advise available how to develop a business, such as from PUM Netherlands Senior Experts. Companies can increase their capacity to trade to international markets, by liaising with CBI (Centre for Promotion of Imports) from Developing Countries, or with the ITC (International Trade Centre).
Finance gap can be bridged
Many small companies also need financial resources to grow their business. The finance gap for such companies has been estimated at USD 5.2 trillion. It is a daunting figure, but let me try to illustrate that the gap can be bridged. For us, starting point is that entrepreneurs have to come up with a potentially viable business plan. At the same time we recognize the need to prepare the ground for banks and other mainstream lenders, resulting from the small scale of the companies concerned and from risks related to constraints in developing economies. As such, we support programs that provide risk capital finance to companies, such as those managed by the FMO (Dutch development bank) and by the IFC (International Finance Corporation). Furthermore, we have launched the Dutch Good Growth Fund (DGGF), in support of local and Dutch companies.
One of the investment partners of DGGF is GroFin, a private development finance institution specialised in small and growing businesses (SGBs) across Africa and the Middle East. They combine medium term loan capital and value-added business support. With the SGB Fund they have been successful, including with support to young entrepreneurs. I had the opportunity to meet GroFin in Ghana, where they partner with 60 companies, throughout a period of on average five years. I had the pleasure to visit one of GroFin’s clients, Mrs Rosemary Dapaa Ababio.
With “Rosejoy” she has established a successful business in serving handcrafted typical Ghanaian dishes. The food is of superior taste and quality, to which I can testify having had lunch in her new outlet in the Accra Shopping Mall. GroFin has provided her the financial support she needed to expand her business, where several local banks refused to do so. She makes good use of advice from GroFin such as in IT, transport for deliveries and marketing. With the outlet, Rosejoy has created new jobs for 17 people.
I was inspired by Rosemary her dedication to run her company, in the middle of modern life to which shopping malls aspire. Rosemary feels fortunate to work with her husband and 4 daughters in expanding her family business, and appreciates that she can keep to the core asset of Rosejoy: preparing tasty Ghanaian food and drinks for her customers.