Four European Development Finance Institutions (DFIs) have committed $80 million to BluePeak Private Capital Fund II (BPCF II), a private credit fund targeting African underserved mid-market businesses. The investment, led by British International Investment (BII), FMO, Swedfund, and the Swiss Investment Fund for Emerging Markets (SIFEM), aims to address a persistent financing gap that has stifled the growth of small and medium-sized enterprises (SMEs) across the continent.
Africa’s mid-market businesses — often too large for microfinance but too small or risky for traditional bank lending — face an estimated $330 billion annual financing shortfall, according to the African Development Bank. These enterprises, which include food processors, pharmaceutical firms, and industrial suppliers, are critical for job creation and economic diversification. Yet, many struggle to secure loans due to insufficient collateral or lack of credit history.
BluePeak’s African private credit fund seeks to fill this void by providing flexible debt financing to established, cash-flow-positive businesses in sectors such as food manufacturing, pharmaceuticals, and financial services. The fund also emphasizes Environmental, Social, and Governance (ESG) compliance, with a particular focus on gender inclusion — qualifying it for the 2X Challenge, a global initiative promoting women’s economic participation.
A Strategic Push for Private Credit in Africa
Private credit — non-bank lending to businesses — has gained traction globally as an alternative to traditional bank financing. In Africa, where banking systems remain risk-averse and capital markets underdeveloped, private credit funds like BluePeak’s offer a lifeline to businesses seeking growth capital without relinquishing equity.
The European DFIs’ commitments break down as follows:
- BII (UK): $30 million
- Swedfund (Sweden): $20 million
- FMO (Netherlands): $15 million
- SIFEM (Switzerland): $15 million
This collaboration underscores a broader trend of European DFIs pooling resources to de-risk investments in emerging markets. By backing a locally managed fund with a proven track record — BluePeak’s first fund launched in 2021 — the institutions aim to demonstrate the viability of private credit as an asset class, potentially attracting more institutional investors.
Chris Chijiutomi, Managing Director and Head of Africa at BII, framed the investment as a dual-purpose initiative: “This partnership extends our reach and provides growth financing to empower businesses in Africa. Its success will serve as a model to attract more private capital.”
For Swedfund, the focus is on poverty reduction. “We invest to increase financial inclusion and strengthen the private sector’s ability to create jobs, especially for women and young people,” said Jakob Larsson, Senior Investment Manager.
FMO, which had previously invested in BluePeak’s first fund, highlighted the fund’s alignment with its inclusive growth mandate. “There is a clear funding gap for businesses that seek to retain ownership while still needing growth financing,” noted Annemarie van Duijn, Manager of Private Equity Global Funds at FMO.
SIFEM, through its portfolio manager responsAbility, emphasized long-term economic resilience. “Investing in growth-oriented businesses is essential to driving development,” said Anthony Mwangi Njoroge, Principal and Co-Head Africa Fund of Funds.
BluePeak’s Track Record and Future Ambitions
BluePeak, founded by former Duet Private Equity executives, has positioned itself as a specialist in defensive sectors — industries that perform steadily even during economic downturns. Its first fund backed companies like a Moroccan dairy producer and a West African pharmaceutical distributor, demonstrating resilience amid global market volatility.
Walid Cherif, BluePeak’s Managing Partner, described the DFI backing as a “strong vote of confidence” in the firm’s strategy. “Raising Fund II in less than four years since Fund I’s first close reflects sustained investor confidence,” he said.
Despite the optimism, hurdles remain. Currency risks, regulatory inconsistencies, and Africa’s complex business environments pose challenges for private credit lenders. Moreover, while DFI participation mitigates risk for other investors, broader institutional capital — particularly from pension funds and insurers — has been slow to enter the African private credit space.
If successful, BPCF II could help shift perceptions, proving that private credit can deliver both financial returns and measurable development impact. For now, the fund represents a critical step in bridging Africa’s financing divide — one loan at a time.