Sanad Fund for Micro-, Small and Medium Enterprise (SANAD)
The Sanad Fund for Micro-, Small and Medium Enterprise (MSME) provides medium- and long-term debt and equity financing to financial institutions in the Middle East and North Africa with the intent of strengthening local financial markets and the micro-, small and medium-sized enterprise (MSME) sector.
The Fund provides debt and equity financing to partner institutions (PIs) in the Middle East and North Africa (MENA) region that serve micro, small and medium enterprises (MSMEs). These PIs are not only banks and microfinance institutions, but also other financial intermediaries such as financial service providers, guarantee funds or venture capital funds. Targeted investors in the SANAD Fund for MSME are both public and private entities. To further maximize both the Fund’s impact and its returns, SANAD also provides hands-on support to partner institutions via its Technical Assistance Facility.
It is an initiative of the German development bank Kreditanstalt für Wiederaufbau (KfW), and it is funded by the German Federal Ministry of Economic Cooperation and Development (known by its German acronym BMZ) and the European Union. It was founded in 2011 and is domiciled in Luxembourg. Sanad focuses in Algeria, Iraq, Jordan, Lebanon, Morocco, the Palestinian Territories, Syria and Yemen with an emphasis on Egypt and Tunisia. As of 2014, Sanad has raised total investor commitments of USD 123 million, with USD 90 million in approved investments.
In funding micro, small and medium enterprise development in the Middle East and North Africa, the SANAD Fund for MSME follows three imperatives:
Maintain and create employment, especially for the youth – primarily through support to small and medium enterprises
Reduce poverty – by facilitating self-employment, primarily through microfinance
Build inclusive financial systems – by cooperating with banks, microfinance institutions and other institutions to facilitate access to financial services
Over the long term, SANAD will engage the market more broadly and deeply with the goal of grooming emerging institutions for access to finance from local and international sources on market-based terms.
Financial Solutions and Allocation
Although its focus is on the ‘missing middle’ of small enterprises, the SANAD aims to support the entire spectrum of MSMEs by providing partner institutions with financial instruments adapted to their respective refinancing needs:
Short, medium and long-term senior debt
Subordinated loans, including mezzanine loans
Certificates of deposit
Term enhancement instruments, e.g. stand-by facilities
Co-investments (syndicated loans or (sub-)participations)
Stand-by letters of credit
Micro enterprises are primarily served by microfinance institutions, while commercial banks cater for small and medium enterprises. However, other institutions that are just as important to the financial sector also address the financing needs of MSMEs. That is why SANAD covers the spectrum of financial actors active in MSME financing:
Leasing and factoring companies
Financial service providers
Other financial intermediaries
SANAD has also established a dedicated Technical Assistance Facility (TAF) to provide hands-on and pragmatic support to partner institutions, so they may more effectively serve the Fund’s target group, implement Responsible Finance, and realize their own growth potential.See more