By Andualem Sisay
The International Finance Corporation (IFC), which is a wing of the World Bank Group, has announced that it is to invest around 7.4 million USD in East Africa to support Small and Micro Enterprises and startup businesses.

According to media reports from Kenya, the institution will give the money to Fanisi Venture Capital Fund, which would focus on startups and small and medium enterprises in Kenya, Rwanda, Uganda and Tanzania.

The major objective of funding these projects is said to help address the lack of financial services that have held back Africa’s development.

Founded last year by the Norwegian Investment Fund for Developing Countries (Norfund) and the Nairobi-based Amani Capital Limited, the Fund focuses on transforming small businesses into key actors.

The fund plans to make investments of between $500,000 and $3 million in a variety of sectors. "It will set up a business services support facility to help pipeline companies overcome technical and governance limitations, pre- and post-investment," said a statement released by the institution.

Head of the fund’s investment team and Chief Executive of Fanisi Capital, the fund’s local investment advisor, Ayisi Makatiani lauded IFC’s support to the Fanisi team.

The statement said IFC’s Gender Program will help the business services facility, while Rwanda Enterprise Development Program will provide training support to the fund’s portfolio companies.

The information obtained from IFC’s website states that, as of December 2009, IFC in partnership with Germany’s KfW Entwicklungsbank, have supported the creation of six new micro-finance institutions in Sub-Saharan Africa.

These businesses are located in the Democratic Republic of Congo, the Republic of the Congo, Ghana, Madagascar, Nigeria, and Tanzania.

It was in 2005 that the two institutions joined hands to launch the Microfinance Initiative for Sub-Saharan Africa. This includes a strategic alliance that is increasing services to economically active populations in the region that aren’t benefiting from banking services by setting-up new private, commercial micro-finance institutions.