Mobilizing diaspora resources into an impact investment fund in Mali

IFAD and I&P partnered to launch this project aimed at mobilizing the Malian diaspora resources into a local Malian impact investment fund supported by I&P: Zira Capital. I&P has identified, trained and supported a core group of potential Malian diaspora investors in France. With the technical support of I&P and legal advisory brought by the project, diaspora investors created a company, Ciwara Capital, to pool their capital in France to be invested in Malian SMEs and start-ups. Ciwara Capital will invest through Zira Capital, and, on the long term, envisions direct investment into SMEs.

Budget:

Financed: EUR 1,556,164
Co-Financed: EUR 191,585

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Duration: 2019 ~ 2024

Project Category Diaspora Investment
EU
Rural Development

Target Groups:

Mali and France (as host country of the Malian diaspora)
Target groups: SMEs financed, generating jobs and spill-over effects on agricultural value chains and Malian diaspora in France

Programme

FFR Strategic Framework

Mali Diaspora investment

Project Goals

To mobilize Malian diaspora investment towards economic development, entrepreneurship and employment in Mali, particularly in rural areas.

Implementing Partners

Investisseurs & Partenaires (I&P) is a pioneer group of impact investment in Africa. It is based in France and focuses its operations in 10 African countries. I&P has raised over EUR 400 million and supported more than 200 companies in Africa. I&P is the manager of 22 dedicated funds to match the different needs of small- and medium-sized enterprises (SMEs). Through IPDEV 2, a fund of funds, I&P supports the creation of local impact investment funds. IPDEV 2 takes minority shares but plays the role of a sponsor fund in those local funds, along with local investors. Besides, I&P plays the role of a close partner with the fund management. In Mali, the local fund sponsored by IPDEV 2, named Zira Capital, has started operating in 2022. It finances SMEs and start-ups with strong growth potential, with needs ranging between EUR 30,000 and EUR 300,000.

Geographic Target

Mali

Outcomes

The diaspora investment solution developed by IFAD and its partner I&P is fully operational.
Driven by members of the diaspora, Ciwara Capital, a diaspora-owned private equity company, was established in July 2022.
In December 2022, Ciwara Capital invested in Zira Capital, and throughout 2023, it gradually set up its management structure and procedures to attract new investors and identify projects for direct investment. During the year, Ciwara Capital participated as a shareholder in Zira Capital's investment decision-making process, while also initiating the search for its first direct investment in an SME in Mali, a process that is ongoing.
Given the extensive process involved in SME investments, IFAD will continue to monitor the achievement of outcomes and collaborate with I&P and Ciwara to disseminate the lessons learned from this project for scaling up and replication. The funds raised by Ciwara from the diaspora slightly exceeded the target of € 200,000, and the anticipated integration of new shareholders is expected to increase the capital by the end of 2024.
In December 2023, Zira's investment committee approved the first investment in a group of private vocational schools, which was disbursed in February 2024, following the necessary administrative procedures.
The second investment, scheduled for June 2024, will be in a rice processing company, with due diligence already well advanced.
In September 2023, IPEV produced a practical guide on private equity to familiarize potential investors with the theoretical basics of diaspora investment mechanisms. Additionally, a white paper on diaspora capital investment is being prepared and is expected to be published in 2024.