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OPIC and Abraaj Capital Commit $150M to Boost SMEs in MENA
Small and medium-sized enterprises (SMEs) in Egypt now have even more opportunities to for growth, as Sunday the Overseas Private Investment Corporation (OPIC) and Abraaj Capital signed a $150 million commitment to support SMEs in MENA.
The $150 million will be invested in SMEs via the Riyada Enterprise Development (RED) Growth Capital Fund, which is managed by Aureos Capital, Abraaj’s small and mid-cap investment platform, borne from a Abraaj's acquisition of Aureous this February.
OPIC, the U.S. government's development finance institution, has committed the funding as a follow-up to U.S. President Barack Obama’s June 2009 pledge to support technological development in Muslim-majority countries. Both OPIC Chief of Staff John Morton and Abraaj Capital Ltd. CEO Mustafa Abdel-Wadood signed the commitment letter at a ceremony in Cairo as part of a U.S. delegation to Egypt.
With Egypt as one of the fund's core target countries, Egyptian SMEs especially stand to benefit. The committment demonstrates that it's easier than it's ever been to find investment as a startup in the MENA region, yet in the face of the opportunity it becomes even more critical for entrepreneurs to execute their ideas well and consider the right time to court investors. With increased capital comes increases expectations, but Egypt’s entrepreneurs have thus far risen to meet challenges this year.
In a statement, Abdel-Wadood said, “As today’s announcement demonstrates, Abraaj Capital is fully committed to supporting the expansion of small and mid-cap (SMC) businesses across the Arab world. We are very pleased to have joined hands in this effort with OPIC, which is investing in long-term economic growth in the wider region. We firmly believe that the SMC segment, which continues to suffer from a dearth of capital, is critical for economic development and job creation. At the same time, having recently invested in 15 SMCs across the MENA in various value-added industries, including two businesses in Egypt, we also recognize the tremendous growth opportunities that exist in this segment of the market."
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