HEVA’s East Africa Creative Business Fund (EACBF) is a patient loan facility being made available from 2021 onwards to successful applicants through debt investments of between USD 20,000 and USD 50,000, over a maximum period of 4 years.
The fund, which is a timely response to the loss of resources and opportunities for creatives during the COVID-19 pandemic, has announced a receipt of 76 eligible applications out of a total of 430 applications from Kenya (248), Uganda (59), Ethiopia (33), Tanzania (30) and Rwanda (60).
All the aforementioned applications were submitted between September and October 2020, when the call for EACBF was officially opened.
76 of all the 430 applications are eligible for the fund, having met its specific requirements: a business’s annual revenue of no less than USD 20,000, and a minimum of one employee (part time or full time).
All the eligible applicants are registered and operational in the East African countries as follows: Kenya (40), Ethiopia (4), Uganda (11), Tanzania (7) and Rwanda (14). Out of these firms, 28 are female-owned or run, while 43 are owned/run by men. 5 applicants preferred not to state their gender.
The value chain distribution was as follows: Crafts (3),Cultural Education (4), Cultural Infrastructure (3), Cultural Tourism (4), Digital Media (10), Events (1), Fashion (21), Film and Photography (9), Food (7), Interior (3), Live Music (4), Music Production (6) and Hair and Beauty (1).
The successful applications will undergo several stages: the business panel to look at the viability of these businesses; a creative panel that will look at the products and market fit; and then a pitch panel that will interrogate the businesses deeper to better understand their alignment to the criteria of the fund.
These businesses will then undergo a due diligence process to review their compliance, and then go through a financial modeling stage that will assess the ability of the business to absorb the loan amount applied for.
The final stage shall be contracting and then announcements of the finalists.
The East Africa Creative Business Fund, worth USD 380,000, is additional financing to HEVA’s existing Growth Fund, designed to provide growth capital to medium sized creative businesses in Kenya (2019), and now East Africa, over the next few years.
The fund is providing financing for creative businesses to help restructure interrupted supply chains in the wake of COVID-19, as well as increase production capacity, diversify offerings, increase market share; increase integration in local and regional value chains; support transition to low-touch and digital capabilities; and take advantage of new opportunities.
Through the new fund, as well as the active Growth Fund Facility, HEVA aims to build on increasing contribution of the creative and cultural industries to the regional GDP and the region’s economy.
Business support remains an essential aspect of the fund’s strategy.
As such, the beneficiaries will also receive tailored strategic assistance on demand, to synergise with their direct cash-flow investment, including relevant financial modelling, with legal and, human resource support, alongside tax, accounting and cash flow management support, as well as access to training and international platforms for market access.
Wakiuru Njuguna, HEVA Partner and Investment Manager says, “HEVA is committed to allocating capital to the creative sector, and we are particularly excited about being able to expand to the rest of East Africa especially at a time like this when availability of capital is limited.”
Adding” We are cognisant of the particular challenges that businesses in this sector face,and a result, we hope that the impact of this facility will be a testament to more capital allocation to East African businesses in the creative sector. Our goal is to commit more capital, as we are looking to raise 20M USD for the regional sector in the next three years.”
HEVA is facilitating the East Africa Creative Business Fund debt investments in partnership with the European Union, and Agence Française de Développement (AFD).
The Growth Fund that feeds EACBF is also in partnership with Agence Française de Développement (AFD).
Both fund facilities cater to creative businesses that are registered and operational in Kenya, Uganda, Rwanda, Tanzania and Ethiopia.
The funds are set to consistently grow dynamic, youth-led creative enterprises over the coming years, with a further focused vision of increasing creative business ownership, enterprise management and general sector leadership among women (especially young women).
This is set to contribute to the growth of the East African cultural footprint in regional and international markets.
Value chains tapped for creative economy value chain investment by these funds include craft, cultural education, cultural infrastructure, cultural tourism, digital media, events, fashion, film, photography, food, interior, live music, music production, and hair and beauty.
HEVA is Africa’s first creative economy catalyst program and has been working in the Eastern African region with continental and international networks since 2013.
HEVA’s addition of the East Africa Creative Business Fund into its existing growth fund financing was specifically designed to address the impact of COVID-19 on medium-size businesses as identified in HEVA’s 2020 study, which was titled “COVID-19 Resilience: Creative Industry Options and Strategies''.
The creative sectors include fashion and apparel; film, TV and digital content; live music and performance (including events, festivals and experiences); and finally, gaming and e-sports.
