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© GLS Liberia
Like many Liberians, entrepreneur Peter Malcolm King knew little about Ebola when the epidemic hit his native country in 2014. But he did understand logistics—and saw that as foreign transportation companies withdrew from the country amid the health crisis, the distribution of medical supplies was under threat, too.
That’s when King’s company, Global Logistics Services Liberia (GLS Liberia), assumed a lead role in handling incoming airfreight and transporting medical supplies from the airport. Long distances and difficult roads didn’t deter him, but he knew that greater capital and better-trained employees could increase his company’s potential to make a difference.
As a new business owner, King was motivated to grow a competitive company that would perform to international standards and effectively serve the market. So he worked with a local risk capital fund that is part of IFC’s SME Ventures program, and received funding and technical assistance that enabled him to build his fleet and transform the scale of operations.
Today, GLS employs 40 full-time staff and competes on par with foreign firms. The firm plans to expand further to meet the Western African country’s vast logistics needs.
Civil wars in Liberia created a generation with little or no education, hampering any entrepreneur’s ability to find employees with essential skills. This is a familiar problem in fragile and conflict-affected economies. It contributes to the enormous challenges faced by small and medium enterprises (SMEs)—including their need for risk capital, which are forms of loans or equity that involve a higher risk tolerance than bank loans.
IFC’s pioneering SME Ventures program was designed to address some of the key financial and business challenges that hold back high-potential small firms in the world’s most difficult markets. The program provides a unique combination of risk capital and advice to entrepreneurs. Building on the private equity model in which fund managers carefully select and cultivate high-potential firms, IFC provides emerging (and often first-time) fund managers with capital to invest and funding to extend technical assistance to their investee SMEs. The program also works with World Bank Group counterparts to engage governments in developing regulatory frameworks.
SME Ventures now encompasses five funds covering nine fragile and frontier markets—Bangladesh, Burundi, Central African Republic, the Democratic Republic of the Congo, Liberia, Nepal, the Republic of Congo, Sierra Leone, and Uganda—most of which are countries where no other funds previously existed. SME Ventures has supported more than $50 million in investment into more than 70 high-growth companies in fragile and frontier markets.
Based on these promising results, IFC is expanding SME Ventures into additional fragile and frontier markets, with the goal of investing $500 million in up to 20 funds over the next four years.
In Liberia, GLS’ growth has already made an impact. New branches throughout the country are expanding the company’s reach as multinational partnerships point toward its even greater potential.
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Published in September 2016