DGGF is stimulating private sector recovery in Afghanistan
DGGF – Financing local SMEs – is a frontrunner when it comes to investing in frontier markets, where there are relatively few international investors. With its investment in InFrontier, DGGF has supported the launch of the only private equity fund for SMEs with an on the ground presence in Afghanistan in 2016.
“DGGF came into the first closing of the fund which was instrumental to get the fund up and running and then supported us in getting additional investors on board.”
DGGF as a catalyst for investing in frontier markets.
Setting up the Afghanistan fund was challenging due to negative preconceptions of the markets. Felix von Schubert and Benj Conway, founders of InFrontier, explain:
“It did help that we were able to show a successful track record of deal by deal investments in Afghanistan prior to raising the fund. DGGF came into the first closing of the fund which was instrumental to get the fund up and running and then supported us in getting additional investors on board.”
InFrontier’s objective is to show that commercial investments in frontier markets are possible and contribute in a sustainable way to the economic development of some of the most challenging countries, like Afghanistan. They believe investors can benefit from some of the most modern investment regulations, free movement of capital and a young generation of entrepreneurs, many of whom have been educated abroad. In this transaction DGGF has played a key role in allowing InFrontier to reach a minimum sustainable fund size. Together with CDC Group, a UK development finance institution, DGGF was able to demonstrate the investability of the Afghan market in order to mobilise capital from other sources and create local jobs.
Generating youth employment in Afghanistan
InFrontier provides much needed capital to high growth SMEs and significant knowledge transfer, considered critical for success in the Afghan context. These SMEs are expected to generate new employment opportunities mostly for the youth (approximately 320 jobs).
“The investment from InFrontier really enabled us to grow our saffron business, launch a new cumin product during 2019, and ultimately promote spices as a force for good,”
says Keith Alaniz, co-founder and CEO of InFrontier investee Rumi Spice.
DGGF impact report
Want to know more about the way DGGF is enabling entrepreneurship in frontier markets? Read our new impact report.