Small Enterprise Assistance FundsAlexander DixonVice President – Africa Tel: 202-737-8463

Empowering African Women Entrepreneurs

The Makeda Fund: The Big Picture

Investment Capital for Women-Run SMEs

SMEs are the backbone of modern economies. The Fund will invest in African SMEs as the region tries to join the global community.

The Fund’s focus on women-owned and managed SMEs will allow it to address the gap in investment caused by business size and insufficient credit.

Investment in SMEs has proven to deliver developmental, as well as financial, returns

• The fight to alleviate poverty in Africa is dependent on the regions ability to facilitate sustainable private sector growth and improved economic opportunities.

•Investing in women-owned and managed SMEs addresses the root causes of poverty by helping people feed their families, buy homes, get health insurance, save for retirement, send their children to school, and plan for their futures.

The Current Problem• The Missing Middle: Small and medium

enterprises (SMEs) are underserved and often overlooked by mainstream investors:– Too big for microloans and grants– Too small for traditional venture firms and

investment banks• Impact of Underinvestment: Large middle

sector of the economy is left with limited short-term funding sources

• The 2nd Step: SMEs are a necessary second step for the micro-entrepreneur to enter the global economy

Idea Micro-Entrepreneur SME Company/Corp.

Micro loans & Grants Venture Firms & Inv. BanksMissing Middle (Makeda’s Opportunity)

Growth of a Business

The Solution: The Makeda Fund

• SEAF and NCEP Group jointly formed a management company, Makeda Fund Managers [MFM], to manage the Makeda Fund.

• The Target: The Fund will invest in SMEs in West Africa (with a particular focus on Nigeria) that: – are women-owned, led or exemplify significant impact on women

stakeholder communities;– have a proven business concept; and – are in need of expansion capital

• Sectors of Interest: Distribution, Professional Services, Retail, Tourism, and Agribusiness; fund open to invest in full range of sectors

• Products Offered: The Makeda Fund will empower women entrepreneurs by: – Providing them access to long-term, patient capital;– Introducing them to globally proven best practices--product development,

sales and marketing, quality control, financial systems and management; – Connecting them to new customers—locally, regionally, and internationally– Plugging them into our world-wide network of sector experts and

successful businesses.

The Opportunity• Investment: Investing in women-owned and managed

SMEs in Africa to improve the daily lives of Africans, and to produce scalable and sustainable business growth with profitable returns.

• Development: Creating stable and secure jobs for unskilled and semiskilled individuals who then receive training, see significant growth in their wages and overall benefits, and are then able to begin to plan for their families’ futures that can end the cycle of poverty.– investing in improved housing– preventive health care – education for their children

• Returns: The near absence of investment in Africa’s SMEs to date offers an untapped market of opportunity for growth and investment with returns on a social as well as financial level for the investor and the community.

Fund Terms• The Fund: The Makeda Fund, a Delaware limited liability company.• Investment Objective : long-term capital appreciation through private

equity in combination with quasi-equity financial instruments and subordinated debt in Nigeria and West Africa.

• Fund Size: $50 million first close; up to $75 million.• Investment Size: $0.5 - $5 million• Fund Manager: Makeda Fund Managers LLC, co-founded by Ngozi Okonjo-

Iweala and Small Enterprise Assistance Funds (SEAF) • Term: 12-year fund • Investment Period: 5 years, with the possibility of two one-year

extensions.• Targeted Investments:

– women-owned or led SMEs which are ripe for expansion and have high growth potential;

– early stage investments in markets where there is demonstrated demand;

– businesses that have developed a product in a niche market with a sustainable competitive edge.

• Management Fee: 3% of the Fund’s committed capital.

Why Choose Makeda: The Experience

Asia• Afghanistan• China• India• Kazakhstan• Kyrgyz Republic• Tadjikistan• Turkmenistan• Uzbekistan• Vietnam

Central and Eastern Europe

• Bulgaria• Croatia• Czech Republic• Estonia• Georgia• Hungary• Kosovo• Latvia• Lithuania• Macedonia

• Montenegro

Where We Work• Poland• Romania• Russia• Serbia• Slovakia• Slovenia• UkraineLatin

America• Bolivia• Colombia• Peru

Why Choose Makeda: The Reach

Francophone Benin Burkina Faso Côte d’Ivoire Guinea Guinea-Bissau Mali Niger Senegal Cameroon Togo

Anglophone Ghana Nigeria

Where We Are Going

Makeda Investment Process

1. Verify compliance with funds guideline2. Business screening and on-site visits3. Background checks and verification of documents4. Assessment of markets and company prospects5. Structure and valuation - development of financial projections

and appropriate investment structure and terms including preliminary valuation

Stages of investment selection and due diligence process

Makeda Fund will build on SEAF’s extensive investment experience in conducting due diligence on SME investments. Procedures include:

POTENTIAL PROSPECT APPROVE CANDIDATE

100 20 3610 2

Exit Strategies• SME investments can be liquid, often with a

higher likelihood for exit than larger investments.• MFM will make investments ONLY if the exit

route can be planned from the start. Exit strategy is based on three pillars:1. Targeting investments with proven business

operations seeking expansion2. Pre-investment capital planning of exit rights

and structure3. Active post-investment support and

involvement

SEAF at a GlanceQuarterly Update as of March 31, 2008

SEAF Presence

Active FundsClosed/InactiveFunds

Totalfrom

InceptionFunds/Facilities1 19 5 24Eligible Countries 30 5 30Portfolio Companies 156 106 262Offices Worldwide 19Staff Worldwide 106

SEAF Performance

Active FundsRealized Value of Active Funds $76 millionUnrealized Value of Active Funds $285 millionTotal Realized & Unrealized Value $361 millionMultiple of Capital Invested 1.5xGross IRR (for Realized and UnrealizedProceeds)

21%

1 Includes officially closed funds only.

SEAF Capital

Capital under Management,($m)

ActiveFunds

Closed/InactiveFunds

Totalfrom

InceptionCommitted by Investors to Funds2 $394 $56 $450Disbursed by Investors to Funds $287 $39 $326Invested in Portfolio Companies $233 $34 $267Returned to Investors3 $53 $14 $67

2 Includes $16.4 million capital released from the investors in some SEAF funds.3 Distributed amount for Inactive Funds includes the book value of portfolio companies for which shares have beentransferred in lieu of sales proceeds. Book value at cost is $10.4 million.

Realizations(Active Funds)

All Realizations

Number of Companies 91Multiple of Capital Invested 2.7xGross IRR 23%

$-

$50.00

$100.00

$150.00

$200.00

$250.00

$300.00

$350.00

$400.00

Capital Disbursed to Companies

Current Fair Market Value (1.5x invested

capital, 21% IRR)

Realized Value, $76

Capital Disbursed to Companies, $233

Current Fair Market Value (1.5x invested

capital, 21% IRR), $285 `

Distressed Sale #8, 0.4x, 5%

Write-off #9, 0.1x, 6%

Partial Exit #18, 4.1x, 31%Trade Sale #20, 3.0x, 36%

MBO #29, 1.8x, 17%

Liquidation #7, 0.4x, 5%

Total 91 Realizations - type & multiple of capital invested, IRR 23%, 2.7x invested capital

Development Impact Study• Every $1 dollar invested in SMEs, generates $12 in the

local community• In most OECD countries, SMEs generate two-thirds of

private sector employment and are the principal creator of new jobs (OECD).

• In the SMEs in which SEAF has invested, 84% of new jobs go to unskilled and semi-skilled workers.

• SMEs train employees and increase wages and benefits.• SMEs benefit a host of stakeholders--from its employees,

suppliers, customers, and competitors, and, through tax payments, social security contributions and frequent philanthropic donations, local government and community.

We believe that if we can combine the natural inclination of SMEs to rely on local and known suppliers with the Fund’s strategic focus on gender, we will be able to demonstrate substantial developmental benefits beyond the commercial success of each investment.

The Makeda Fund: A Chance to Make a

DifferenceThe Makeda Fund represents an opportunity to:• Make a visible and important impact both developmentally

and commercially• Demonstrate that gender need not be a barrier to commercial

success in Africa• Provide a model that is capable of expansion elsewhere in

Africa and throughout the developing world

Thank you for your attention and interest

Small Enterprise Assistance FundsAlexander DixonVice President – Africa Tel: 202-737-8463

Small Enterprise Assistance FundsAlexander DixonVice President – Africa Tel: 202-737-8463