Kukula fund i – growing sustainable business changemakers binary to hexadecimal chart


• It is structured as a Collective Investment Scheme quoted on Lusaka Stock Exchange and regulated by the Securities and Exchange Commission of Zambia.

Kukula Fund I will be a true investment partner who engages actively in the SMEs it finances. Implementation of Management Information systems, deal sourcing and operations streamlining are part of the active engagement. This active, participatory investment approach will serve to mitigate the inherent risk of this market segment.

Kukula Fund I is expected to have profound public participation python example programs. This is due to the fact that the fund is quoted on Lusaka Stock Exchange, thereby giving a broad spectrum of investors access, ranging from individual to institutional investors. Thus, unlike ordinary private equity and venture funds Kukula’s solution is not limited to a small group of institutional foreign investors.

The Prospectus for Kukula Fund I is available country wide through Barclays Bank Zambia who serve as receiving bank. The countrywide coverage is done to ensure the widest possible investor participation what is a binary system. A broad investor base has the additional benefit of increasing liquidity of the funds securities once trading on the Lusaka Stock Exchange. Being listed on the Lusaka Stock Exchange brings additional public awareness about the fund as it appeals to everyone to participate as an investor.

Asymmetry of information, Informality, Lack of collateral, Lack of financial capacity, Lack of SME access to skills / knowledge / markets, Unavailability of financial products tailored to SME needs, Lack of institutional capacity of financial intermediaries, High transaction costs for financial intermediaries to serve SMEs, Lack of competition / incentives for financial intermediaries to serve SMEs, Underdeveloped local capital markets (term local currency funding, exit options for SME equity), General barriers to SME development related to investment climate, Lack of financing to women entrepreneurs, Specific barriers to fragile and weak states.

A Due Diligence process is made on each potential investment and all applicants and information submitted are cross-checked to avoid adverse selection.

Kukula Capital has a flexible & calculated ‘risk taking’ approach to collateral, where third party collateral will be considered when sufficient collateral is not available.

Kukula Fund I provides a structured and formalised link between local institutional investors with excess local currency (due to lack of securitised local investments) and the SMEs who are looking for long-term finance.

Part of the active engagement is to use the team’s extensive network in Zambia and abroad to identify technical partners for training and knowledge transfer, as well as identifying new suppliers and clients.

Kukula Capital has developed an investment manual that focuses on capacity building with the SMEs to ensure a high degree of financial reporting and transparency currency conversion usd to aud. The investment officers in Kukula Capital are trained on the investment procedures whereby a strong institutional capacity being built.

The high transaction costs are addressed by establishing a technical assistance fund to support the cost of developing business and marketing plans as well as management support. Once the fund size is at a sufficient level the high transaction costs can be carried by the management company, which currently is supported by the Danish International Development Agency and the African Management Service Company.

Through Kukula Fund I the team is looking at co-financing the SMEs with other financial institutions such as local banks amazon international shipping rates. Such co-financing will reduce transaction costs and the issue of adverse selection for banks, thereby giving the banks a chance to finance SMEs i.e. seasonal working capital and long-term loans as well.

The issue of underdeveloped capital markets is addressed by providing long-term local currency finance. The financing is structured with an equity option only exercised in case an exit is found either as a direct sale or through listing on the Lusaka Stock Exchange.

As a locally structured management investment fund, Kukula Fund I will contribute positively to the investment climate as well as the perception of the same.

Proposals will be considered for their intrinsic merits and without gender bias. However, it is Kukula’s experience that there are many well-performing SMEs owned and managed by women in Zambia who have experienced prejudicial treatment. Kukula will consider such applicants positively.

By introducing a solution with international standards tailor-made for the local market, Kukula Capital supports the development of more structured and commercialised private sector. A strong private sector is a prerequisite for the development of weak states inr to usd exchange rate. Impact

Kukula Fund I is in the process of being capitalized and carry out the first investment, which is expected for November 2010. For this reason, the empirical impact is mainly based on past experience and forecasts.

One of the main reasons for banks not financing SMEs is their lack of understanding of SMEs as well as usage of basic and rigid financing models aud usd yahoo. Without active participation the SME segment is often too risky to finance due to asymmetric information.

Since Kukula Capital will engage actively in the SMEs it will finance, it will assist the growth of the business and increase success rate of the SMEs achieving their intended growth.

One example is a tissue factory which was financed with a local currency loan equivalent of USD 100,000. This SME created 10 jobs and the loan was fully paid back before the two year maturity.

Kukula Fund I is conducting a due diligence process regarding financing a Zambian SME with an annual turnover of the equivalent of USD 220,000. The company is looking at expanding production from sawmilling to value added, by producing laminated wood boards gbp usd rate today. A detailed feasibility study confirms that this expansion will create 17 semi-skilled jobs, quadruple turnover and significantly increase profitability.

Kukula Fund I is currently the only way for Zambian and international investors to get exposure to this new asset class of Zambian SME investments.

In this initial stage, the first 7 local and international investors in Kukula Fund I confirms that the product is attractive from a local and international viewpoint. As of August 2010 USD 250,000 has been raised.

1. Financing partners – In order to successfully reach a sustainable capitalisation of USD 10 million within 3 years, Kukula Capital needs to engage both local institutional investors as well as international institutional investors and DFIs.

2 binary math. SME Stakeholders – Since Kukula Fund I will engage actively in the SMEs to be financed the team will facilitate partnerships with the SMEs on a need to need basis. This will be towards identifying new sales channels, sourcing new equipment, accessing TA funding, training etc.

3. Credit guarantee facility – Many SMEs have a hard time providing collateral whether being directly form the company or third party collateral. For this reason Kukula Capital is looking at identifying a price competitive credit guarantee facility to collaborate with.

Non-financial issues such as loss of key employees could potentially slow down the development of this solution verizon modem setup. However an employee shareholder ownership schemes serves to mitigate such risk.

Another potential issue could be systemic risk. If any Zambian asset manager or mutual fund where to collapse, it could spread uncertainty and distrust in the Zambian financial market exchange rate us to indian rupee. Such an event could jeopardise the slow progress in the development of a savings and investment culture in Zambia as well as scare away potential international investors.

Kukula Fund I will focus on Zambia for the initial investments and then expand into the region using the same business model through Kukula Fund II. The demand for SME segment financing is extremely high in both Mozambique and especially in Zimbabwe; a country emerging from deep socio-economic crisis. For this reason these two markets are the targets for a future regional expansion.

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