Our investments will focus at the, so called, “missing middle”. The missing middle consists of businesses that are too small and too risky for private equity or regular financial institutions, but too large for microfinance.
Triple I invests in SMEs that have:
- A Legal, Viable and Scalable Business Model
Triple I will only invests in companies with the ability to become financially self-sustainable and the ability to scale. The SME is legally registered and pays all relevant local taxes (no tax evasion). The business has shown at least a full year of financial reporting drawn up by an accountant. The business employs between 10 – 250 persons and has a maximum turnover of € 10 million, by which, because of its size of business, the SME has limited access to commercial financing. Furthermore, the company is not listed on Triple I’s exclusion list.
- An outstanding Entrepreneur and Management Team with a relentless pursuit of mission
Triple I will look for companies which are established by dedicated, focused, both socially and financially driven entrepreneurs with good knowledge of their business. The entrepreneur (together with his/her first line relatives) has the majority of the shares (no involvement of state, church and politics) and is supported by a strong management team. Triple I aims all targeted entrepreneurs to be locals, however in some cases foreign entrepreneurs and foreign shareholding will be allowed when social impact will be realised in the targeted countries.
- A perfect fit with Our Theory of Change and a drive for positive impact
Triple I invests in SMEs that have a substantial (expected) positive impact on the lives of the BoP, in particular women, youth and small farmers through: job creation, improvement of income and/or availability of necessary products/services. The business complies with the Environmental, Social and Governance (ESG) criteria Triple I uses.
In line with our belief that target entities need both capital and support to scale successfully,
Triple I would only consider investments in areas where Oxfam/Triple I is present or in the neighborhood to provide local Business Development Support and Post-Investment Venture Assistance through local business advisors, local partners or through Triple I’s local representatives
Triple I’s target countries are:
- South east Asia (Vietnam, Thailand, Cambodia, Laos, Myanmar, Indonesia and Nepal)
- East Africa (Uganda, Rwanda, Tanzania, Kenya and Ethiopia)
- West Africa (Nigeria)
Depending on SME characteristics and market conditions, Triple I can provide capital under the following terms:
- Triple I provides: equity, quasi-equity and debt
- Investments will be between EUR 100.000 to EUR 500.000 (or local currency equivalent)
- Maturities can be tailored to meet the specific needs of the investment, with flexible repayment schedules adjusted to cash flows of the investment
- Interest rates can be either fixed or variable and are market related
- Investments do not require a collateral always (depending on the SME characteristics and local context)
- Financial criteria of our investments:
1) Minimum turnover Uganda € 100k, other countries € 300k
2) Net profit: Break-even situation (at least operational profit)
3) Max financing: 1 x turnover
4) Solvency: minimum of 20% after investment
5) Own contribution: minimum of 20% (ratio 1 € to 4 €)
Remark 1: At least 4 out 5 criteria must be met
Remark 2: Own contribution is invested money by the entrepreneur including retained earnings.
Triple I does not have a formal exit strategy. Our aim is to partner with our clients for a longer period of time (maximum of 8-10 years). The payment scheme of the loan provided is a clear moment on which date the last payment is being made and the contract ends. In case of an exit by sales of shares it strongly depends on the potential buyers. The monitoring of the impact of our loans and provided equity can last longer as agreed by contract in order to measure our impact on the longer term as well.
Triple I does not invest in:
– Cooperatives, farmer groups, savings, credit and cooperative organizations, NGO’s, private persons, listed companies and foundations.
– Companies active in real estate, project finance (housing, water irrigation and power plants), leisure (hotels, restaurants and travel agencies), private schools and private health clinics.
We refer also to our exclusion list.