Across several African countries, remittances from citizens abroad serve as an important part of GDP. A group of Africans in the diaspora have latched on to this reality and launched an intitiative to transform this trend.
RemitFund, a non-profit organization has launched an investment fund called African Diaspora Investment Fund (ADIF). ADIF aims to transform international remittances into social impact funds to power businesses and other social projects.
RemitFund aims to leverage these financial flows for greater social impact on the continent,” says Grace Camara, Founder and Executive Director of Remitfund.
“Remittances in the traditional sense are a form of diaspora-driven development and provide a huge safety net for many families,” said RemitFund’s founder and executive director Grace Camara.
ADIF is powered by donations from Africans abroad, allowing them donate a certain percentage of their remittances to the fund.
The initiative will provide funding for African and African-diaspora led business. In particular, the fund targets businesses advancing critical areas of the United Nations Sustainable Development Goals (SDGs). These include businesses in the agricultural sector and renewable energy businesses.
Originally launched in June 2018, the ADIF fund is expected to make its first investment in 2019. Like regular venture funds, ADIF will pursue deals in the form of equity and or debt financing.
But beyond the ADIF fund, RemitFund has its eyes set on further ambitions in 2019. RemitFund is looking to launch a crowd funding platform in 2019. It also plans to launch an African Fellowship for startups. Leveraging a network of tech hubs across Africa, the fellowship is scheduled for launch in later in the year.
Why is RemitFund Targeting Remittances?
Remittances is hugely important financial activity in Africa and across the globe. In 2016, $601 billion was transferred by over 250 million global migrants to their home countries. Sub Saharan Africa accounted for $39 billion of this sum, with Nigeria receiving over two-thirds of this sum.
Remittance equally serves as an important lifeline for Africans as it helps to support families’ livelihoods and businesses.
However, due to the high levels of unemployment, many families are increasing reliant on these remittances.
How RemitFund will transform and identify businesses worth investing will go a long way to redefine impact investing on the continent.
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