COSEF

Introduction

COSEF is an impact investment company in Uganda that invests in women owned, led and focused small growing businesses in agribusiness, manufacturing, clean energy, education, tourism and hospitality, health and retail sectors through leveraging support of business development organizations as catalytic funders and technical assistance partners.

Background

There is a $42bn financing gap for female entrepreneurs in Africa. These entrepreneurs are unable to attract loans from commercial banks because they lack adequate collaterals and are thus considered very risk. Private equity would have been a perfect option, but unfortunately private equity firms target larger investments of $10m-plus, particularly in the telecoms, consumer and commercial banking sectors, leaving out small growing companies which are the drivers of the African economy for they make upto 90% of the businesses. A few private equity firms making smaller investments target tech startups because they offer best exit opportunities, which yield substantial profits. And yet these make up less than 15% of the businesses on the continent. Moreover the undeveloped nature of African capital markets makes exiting investments extremely difficult.

Hence mezzanine debt, which has flexible terms is the only available long term financing option for women owned and led small businesses. However most investors consider Africa a very risky market and mezzanine a risky form of capital, and hence require de-risking instrument for their investments.

Technical assistance is equally important for these enterprises to grow, and if it’s to benefit many entrepreneurs on the continent, then there is need for a cost-effective delivery model.

With mezzanine debt as the primary long term financing option for women entrepreneurs, there is need for innovative partnerships to not only de-risk investments to attract more funding to close the financing gap for women entrepreneurs on the continent, but also to cost effectively grow the businesses.

COSEF supports women owned, led and focused small growing businesses working in 7 of the fastest growing sectors and engines of job creation of agribusiness, manufacturing, clean energy, education, tourism and hospitality, health and retail, through leveraging support of partner business development organizations as catalytic funders and technical assistance partners.

Thus through working in partnership with business development organizations not only as providers of catalytic first loss capital, but also as sustainable technical assistance partners, COSEF presents an innovative solution that; (i) de-risks investments, crowding in substantial funding for financing female enterprises on the continent, and (ii) cost effectively grows the businesses to create impact at scale.

COSEF’s vision is to mobilize atleast $5.4bn in private investments for women owned, led and focused businesses working with partner business development organizations and asset managers investing in other sectors on the continent, closing the $42 billion gender inequality gap in access to finance by atleast 13%.