Paper

Venture Capital as a Means to Promote Sustainable Entrepreneurship in Africa: A Survey of 25 Venture Capital Organisations Active in Africa

How can venture capital funds serve the SME sector?
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This survey report looks at the role of VC funds in promoting economic development in Africa, with a special focus on SMEs and corporate social responsibility (CSR).

The survey aims to find the contribution of VC funds in sustainable development in Africa, and the bottlenecks faced by them. It also explores the possibility of integrating CSR principles and the demand for special business development services (BDS) fund and/or program.

The report states that raising awareness, creating an enabling environment and capacity building can help entrepreneurs develop their CSR strategy. Findings include:

  • Venture capital has a positive impact on economic development in Africa;
  • Huge gap exists between the supply and demand of venture capital;
  • Foreign currency risks, macroeconomic instability and lack of quality of entrepreneurs are main bottlenecks for successful fund performance;
  • Perceived risks are different from real risks of investing in Africa;
  • CSR impact is not measured by venture capital and private equity funds;
  • Integrating CSR principles without sacrificing profitability is possible;
  • Demand exists for BDS program for the venture capital sector based on CSR principles.