Figures released by CDC Group plc, the UK’s development finance institution, show that it now finances more businesses than ever in its 64-year history.
Yet despite increasing optimism about economic prospects in sub-Saharan Africa and South Asia, CDC says many entrepreneurs in poor countries still lack access to patient, long-term investment.
In 2011, CDC backed 1,126 private sector businesses in 74 developing countries (up from 930 in 2010). CDC continued to get its capital to work, with new investments in businesses standing at GBP364m for the year.
Businesses backed by CDC capital also showed increasing development impact by employing more people than ever. 976,000 jobs were supported in businesses receiving CDC capital in 2011 (up from 796,000 in 2010).
However, difficult financial market conditions in many developing countries meant that CDC showed a valuation loss of GBP72m in 2011 (compared to a valuation increase of GBP269m in 2010). Despite this loss, valuations for companies in CDC’s portfolio still outshone the MSCI benchmark by 19% in 2011 (and by 25% over a rolling five-year basis).
Diana Noble, CDC’s Chief Executive, says: “Long-term finance is the lifeblood of businesses in developing countries across Africa and South Asia. Without the economic growth that these businesses play a part in generating long-term development and poverty reduction will be undermined.
“That’s why I’m pleased that CDC’s capital is reaching more businesses than ever before. Some of these businesses would not exist without CDC’s capital. For others, our investment brings growth, new jobs and improved environmental, social and governance standards.”
